India's ecommerce giant Flipkart on Friday said it has acquired Bangalore-based payments start-up PhonePe Internet Pvt. Ltd, which was launched last December by former Flipkart employees Sameer Nigam, Rahul Chari and Burzin Engineer. The amount paid for acquisiton was remain undisclosed but the deal is not cash transaction.
The PhonePe team will join Flipkart but will function as an independent business unit.
PhonePe is Flipkart's third major acquisition in payments segment, after it bought payments start-up NGPay (Jigrahak Mobility Solutions Pvt. Ltd) in 2014, and acquired FX Mart, last August.
Interestingly, PhonePe's founders earlier founded Mime360, digital media distribution firm, was also acquired by Flipkart in 2011 to build its later aborted digital music distribution platform Flyte. PhonePe is their second startup the founders has sold to Flipkart.
PhonePe, which boasts itself as India's first UPI based App to provide a cashless and a seamless payment experience, hasn't yet launched a product, but is working on a payments solution around the Unified Payments Interface (UPI), an initiative of the National Payments Corp. of India, which will allow fund transfer between banks and will make inter-operability between banks and instant payments possible by using a single identifier like the Aadhaar number or a virtual address.
The UPI is a part of a set of government programmes and technologies, together called India Stack, that companies can use to slash costs in offline authentication and provide services legally approved by the government to anyone with a mobile phone. The UPI is set to be formally launched in April.
"Payments has been one of the biggest hurdles for mass adoption of online shopping in India. UPI has the potential of transforming the entire payments ecosystem in the country. The acquisition of PhonePe is in line with Flipkart’s focus on driving innovation on the payments front. I am delighted that two Flipkart veterans—Sameer and Rahul—are at the helm of this initiative," said Binny Bansal, chief executive officer, Flipkart, in a statement.
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