PhonePe CEO Sameer Nigam & CTO Rahul Chari discuss the company’s recent fund raise, redomicile and future plans
Bengaluru, January 27, 2023: PhonePe, one of India’s largest fintech platforms, today held a live session featuring Sameer Nigam, Co-Founder & CEO, PhonePe and Rahul Chari, Co-Founder & CTO to address questions around the recent news around PhonePe’s recent $350Mn fundraise led by General Atlantic, the company’s redomicile from Singapore to India and future plans for India’s most valued fintech company.
To kickstart the session Sameer spoke about PhonePe’s domicile change and the reason for the move. He said ‘’I think for the mission PhonePe is on – which is solving for at-scale financial inclusion and digitization – the move to India was right. India is where we started and where we are focused on, and I think we will be here for the next couple of decades. And to that end, for various reasons like being a highly regulated entity and wanting to eventually list here, the change of domicile to India for PhonePe as a business and as a company is the right answer.’’
Talking about the challenges faced in moving domicile, Sameer said, “If you want to move to India as a domicile, we have to do a fresh market valuation and pay tax on the delta. Our investors have paid almost Rs.8000 crores in taxes just to allow us to come back to India. Another challenge was to convince several thousand employees that they’re ESOPs are back to zero vesting at a one year cliff, because the law in India says if you migrate, you still have to start with a new one-year cliff. It’s very hard for startups, particularly early stage startups, to convince employees that they’re ESOP vesting status reverts back to zero.” Sameer also spoke about the need for more progressive Indian laws that allow startups to move back to India, given how rewarding having a relationship with customers in the local ecosystem is.”
Touching upon the recent spinoff from Flipkart, he said, ‘’When we started talking about the domicile shift for PhonePe, obviously we had to align not just our board and our direct shareholders, but Flipkart being the majority shareholder, their board and their investors as well. It is a big investment of time, money, and effort. And when we started having discussions on a long-term view, it became clearer that these two companies are on very, very different tracks strategically as well as market-wise. So it made more sense to separate the two entities. This also gives us the opportunity to be able to get in other investors who may have their investment strategies more aligned to the kind of business that we’re in, which is fintech & payments.”
Addressing the excitement around the recent fundraise and the $12Bn valuation, making PhonePe a decacorn and India’s leading Fintech company, Sameer said, “General Atlantic, is a really good blue chip global investor that has a long view on companies, which gives us the flexibility to be able to actually do at-scale investments in new sectors like insurance, lending, broking or ONDC. They understand what we’re trying to do really well as they are tracking the ecosystem. So I think it was just easy alignment at several levels, obviously excited to have them anchor the round.’’
Expressing excitement about PhonePe’s future strategy, Rahul said, “We want to play a very important role in fulfilling the ambition of taking digital payments in India to a billion transactions a day, from close to half a billion, with NPCI, RBI and the entire Fintech ecosystem. We want to actually help scale payments with a whole bunch of new initiatives that are coming on UPI. We will be looking at launching new products and offerings be it lending on the merchant side, lending on the consumer side, a lot of new open API initiatives like account aggregator and ONDC. I think India is just going to explode on the digital front and with the kind of patient capital backing us, we’d love to actually play a small and move it over time.”
Watch the full conversation here: https://youtu.be/NLJ4O6TAF5A