Flipkart Employees Set to Receive $700 Million Payout in PhonePe Separation
- ByStartupStory | July 7, 2023
Employees at leading ecommerce platform Flipkart are poised to receive a cumulative payout of $700 million this month as part of the hive-off process of payments company PhonePe. This one-time payout is intended to account for PhonePe’s value in Flipkart’s shares and will benefit over 24,000 former and current employees at Flipkart and Myntra, according to media reports.
In an email sent to employees, Flipkart outlined that the payout would be $43.67 per vested option for Tracxn Flipkart employees. For current employees, the payout will consider both vested and unvested granted options. The compensation is expected to be disbursed on or before July 31.
The separation of PhonePe from Flipkart, which operated as a subsidiary until December 2022, unlocks value for majority shareholder Walmart. While Walmart holds nearly 72% stake in Flipkart, its shareholding in PhonePe stood at close to 85% as of June 2023.
Following the demerger, PhonePe has been in the process of raising $1.1 billion from investors, including TVS Capital Funds and General Atlantic. The company’s valuation reached $12 billion as of February 2023, making it a significant player in the market. With a market share of nearly 50% by value in UPI payments, PhonePe has been aggressively expanding its payment business and recently announced its entry into Point-of-Sale devices to attract merchants.
The payout to employees reflects the significant growth and success of PhonePe, further solidifying its position as a leading player in the payments industry. It also demonstrates Flipkart’s commitment to rewarding its employees and acknowledging their contributions to the company’s success.
Flipkart is yet to respond to specific queries regarding the payout. However, this development is expected to bring financial benefits to the employees and reinforce Flipkart’s position as a key player in the Indian ecommerce landscape.
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