In a live session titled ‘Making it Big in India’ Sameer talks aboutstartups aspiring to move back to India-Rahul speaks about new initiatives to scale up the PhonePe business Bengaluru, – Jan 25th, 2023 – PhonePe, one of India’s largest fintech platforms, today held a livesession featuring Sameer Nigam, Co-Founder & CEO, PhonePe and Rahul Chari,Co-Founder & CTO to address questions around the recent news aroundPhonePe’s recent $350Mn fundraise led by General Atlantic, the company’sredomicile from Singapore to India and future plans for India’s most valuedfintech company.
To kickstart thesession Sameer spoke about PhonePe’s domicile change and the reason for themove. He said ‘’I think for the mission PhonePe is on – which is solving forat-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 behere for the next couple of decades.
And to that end, for various reasons likebeing a highly regulated entity and wanting to eventually list here, the changeof domicile to India for PhonePe as a business and as a company is the rightanswer.’’ Talking about thechallenges faced in moving domicile, Sameer said, “If you want to move to Indiaas 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 comeback to India.
Another challenge was to convince several thousand employeesthat they’re ESOPs are back to zero vesting at a one year cliff, because thelaw in India says if you migrate, you still have to start with a new one-yearcliff. It’s very hard for startups, particularly early stage startups, toconvince employees that they’re ESOP vesting status reverts back to zero.”Sameer also spoke about the need for more progressive Indian laws that allowstartups to move back to India, given how rewarding having a relationship withcustomers in the local ecosystem is.”
Touching upon therecent spinoff from Flipkart, he said, ‘’When we started talking about thedomicile shift for PhonePe, obviously we had to align not just our board andour direct shareholders, but Flipkart being the majority shareholder, theirboard and their investors as well. It is a big investment of time, money andeffort. And when we started having discussions on a long-term view, it became clearer that thesetwo companies are on very, very different tracks strategically as well asmarket wise.
So it made more sense to separate the two entities. This alsogives us the opportunity to be able to get in other investors who may havetheir investment strategies more aligned to the kind of business that we’re in,which is fintech & payments.” Addressing theexcitement around the recent fundraise and the $12Bn valuation, making PhonePea 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 investmentsin new sectors like insurance, lending, broking or ONDC.
They understand whatwe’re trying to do really well as they are tracking the ecosystem. So I thinkit was just easy alignment at several levels, obviously excited to have themanchor the round.’’ Expressingexcitement about PhonePe’s future strategy, Rahul said, “We want to play a veryimportant role in fulfilling the ambition of taking digital payments in India to a billion transactions a day, fromclose to half a billion, with NPCI, RBI and the entire Fintech ecosystem.
Wewant to actually help scale payments with a whole bunch of new initiatives thatare coming on UPI. We will be looking at launching new products and offeringsbe it lending on the merchant side, lending on the consumer side, a lot of newopen API initiatives like account aggregator and ONDC. I think India is justgoing to explode on the digital front and with the kind of patient capitalbacking us, we’d love to actually play a small and move it over time.” Watch the full conversation here: https://youtu.be/NLJ4O6TAF5A
