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PayPal reportedly in talks with Flipkart-owned PhonePe for funding

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CIOL Writers
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PayPal finally comes to India

Flipkart’s PhonePe is in talks with global online payments giant PayPal to raise capital independently at a $500 million valuation, according to a Times of India report.

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Citing people in the know of the things, the report said that PhonePe has held preliminary talks with US-based digital payments company PayPal Holdings for a “share sale.” Apparently, PayPal isn’t the only one that is keen to have a pie in the India’s growing e-payments market; Naspers-owned PayU had also held initial talks with the startup.

Post demonetization, PayPal is having keen eyes on India’s e-wallet space. In December, the online payments giant had almost finalised a deal to pick up a 25 percent stake in Snapdeal-owned FreeCharge for around $200 million. But the deal fell through, and hence PayPal has turned to PhonePe now.

“PhonePe’s valuation expectation is based on the huge Flipkart user base, at around 75-80 million, which the payments app can possibly tap into. The talks have still not reached a stage where the company has received any term sheets, though,” a source quoted in the report.

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PhonePe was launched in December 2015 by former Flipkart executives Sameer Nigam, Rahul Chari and Burzin Engineer and was acquired by Flipkart last April. The company also committed $100 million to PhonePe over a three year period.

In January, PhonePe said it crossed 10 million downloads on Google Play. The Yes Bank-powered digital payments app claims to be doing over a lakh transactions every day.

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