Sameer Nigam, the co-founder and CEO of payments giant PhonePe, hit out on being called a foreign-owned company because of its Walmart ownership, stating that it paid nearly a billion dollar in taxes to get domiciled in India.
A candid Nigam also highlighted the circumstances under which it was forced to sell to Flipkart many years ago.
Speaking out against the tag of being foreign-owned, Nigam recounted PhonePe's journey, starting with its inception in India and subsequent merger with Flipkart in 2016.
Nigam spoke about how competitive pressures, particularly from well-funded rivals like Paytm, necessitated PhonePe's merger with Flipkart to effectively compete in the digital payments landscape.
"PhonePe was started in India. To compete effectively, I sold my entire company to Flipkart," Nigam said.
"We believed in the incredible potential of the UPI (Unified Payments Interface) ecosystem and sought air cover from Flipkart's founders, the Bansals, to build something iconic,” he added.
Nigam was responding to Moneycontrol’s query around the recent parliamentary committee’s report flagging domination of “foreign-owned” entities, including Walmart-owned PhonePe and Google Pay, in Indian fintech ecosystem.
The co-founder clarified that PhonePe's alignment with Flipkart's jurisdiction (Singapore) during this period was a pragmatic move dictated by business imperatives.
Despite being part of the Flipkart group and subsequently the Walmart group following Flipkart's acquisition, he emphasised PhonePe's recent move to reverse flip back to India as a testament to the company's unwavering commitment to its Indian origins.
“I don't have a single share in PhonePe. I have ESOPs like every other employee because I had to sell my company just to compete. But what no one realises that it meant that I had to be under the Flipkart jurisdiction (Singapore),” he said.
PhonePe's journey took another turn with Flipkart's acquisition by US-based retail giant Walmart.
Nigam revealed that the news of Flipkart's sale to Walmart came as a surprise, highlighting the unpredictable nature of business.
"When we informed Walmart of redomicile to India, they displayed commendable cooperation. They paid billion dollars in taxes to facilitate the transition. It’s no joke. So what behavior am I exhibiting that makes my company foreign owned," Nigam remarked.
Flipkart acquired PhonePe in 2016 and moved the payments firm's entire base to the country from Singapore. In 2018, Flipkart was acquired by Walmart, and PhonePe was a part of the transaction as well.
Only recently, Flipkart and PhonePe completed their separation and both entities now continue to operate under Walmart, independently.
Post the hive off, PhonePe re-domiciled back to India and is planning to list here soon. As the Indian government tightens norms for digital payments firms and overall fintech segment, redomiciling to India allows PhonePe, a market leader in UPI transactions, a better window for compliance.
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