PhonePe expands board, inducts former revenue secretary Tarun Bajaj, two executives from Walmart

A PhonePe spokesperson confirmed the board appointments in an email response to Moneycontrol.

Payments and financial services app PhonePe has expanded its board by appointing three new members, to strengthen governance and pave the way for a potential public listing in India.

The Walmart-owned mobile payments behemoth has appointed former revenue secretary Tarun Bajaj, Walmart's Chief Financial Officer John D Rainey, and Chief People Officer Donna Morris to its board, per a regulatory filing filed last month accessed by Moneycontrol.

Governance in focus
Fintech major PhonePe, which has the largest market share for UPI in India, has been broadening its ambitions beyond payments in recent months, with the launch of an e-commerce-focused app called Pincode and an investment app for stocks and mutual funds called Share. Market.

PhonePe's moves to fortify its board also come at a time when its larger rival Paytm has been under fire for gaps in compliance and governance. Last week, the Reserve Bank of India launched a major clampdown on Paytm Payments Bank observing a complete disregard by the company for regulatory standards and compliance requirements.

A PhonePe spokesperson confirmed the board appointments in an email response to Moneycontrol.

"We would like to confirm that Mr. Tarun Bajaj will be an Independent Director on the PhonePe Board and Chairman of the Risk Committee."

"We would also like to confirm that Mr. John D Rainey (Executive Vice President and Chief Financial Officer, Walmart Inc.) & Ms Donna Morris (Executive Vice President, Chief People Officer, Walmart Inc.) have joined the PhonePe Board as Non-executive Directors," the spokesperson said in a statement.

PhonePe board of directors

New-look board

With this, the PhonePe board now has eight members. The existing members include founders Sameer Nigam and Rahul Chari, Flipkart co-founder Binny Bansal, Rohit Bhagat, and Walmart's Leigh Douglas Hopkins.

Bajaj, a 1988-batch IAS officer of the Haryana cadre, served as the Revenue Secretary in the Indian government before superannuating in November 2022.

The 61-year-old has served on the boards of top banks and held directorship on the Central Board of the Reserve Bank of India (RBI) and the Board of SEBI.

In December last year, he also took charge as an independent director at FMCG major Hindustan Unilever (HUL).

At the same time, Rainey is a finance veteran, with over two decades of experience in financial management. Before joining Walmart in 2022, he served as PayPal's chief financial officer and executive vice president, global customer operations.

Morris comes with more than 25 years of leadership experience in the people function and joined Walmart in 2020 from Adobe, where she served as chief human resources officer.

PhonePe's ambitions
PhonePe, which was originally incubated in Flipkart, also became one of the first unicorns to flip its base from Singapore to India in October 2022, a move that has encouraged other foreign-domiciled start-ups to follow suit.
Besides racking up $850 million funding last year at a pre-money valuation of $12 billion, it recently rejigged top management and appointed four senior executives as CEOs of major business segments.

Hemant Gala took over the lending business; Vishal Gupta, who is part of the founding team was promoted to the role of CEO for PhonePe’s insurance business.

Meanwhile, Ujjwal Jain was promoted to the role of CEO of wealth and stockbroking arm, ShareMarket, and Vivek Lohcheb is now leading quick commerce vertical, Pincode.

The reorganisation and fundraise run parallel to PhonePe’s elaborate expansion plans, as it looks to turn profitable in the near future, leading up to an IPO.

In FY23, the Walmart-backed firm reported a 77% jump in consolidated revenue at Rs 2,914 crore, mainly due to its expansion within the digital payments space along with launch and scale-up of new products and businesses like smart speakers, rent payments, and insurance distribution.
PhonePe India Pvt Ltd -- which houses the payments business -- posted a widening of operating loss, before ESOP cost, to Rs 1,755 crore. On adjusted basis (excluding ESOP expenses), it stood at Rs 159 crore in FY23 versus a loss of Rs 455 crore in FY22.

Bureaucrats and bankers in demand
The former revenue secretary’s appointment also comes at a time when Indian fintech firms are looking to navigate choppy regulatory waters and strengthen compliance.

Many fintechs have been appointing former government officials and banking veterans to their respective boards.

In April 2023, Razorpay formed a new internal advisory board with former RBI Deputy Governor N S Vishwanathan, former State Bank of India Managing Director (MD) Arijit Basu, and retired civil servants—Aruna Sundararajan, former Secretary, Ministries of Steel, IT, and Telecom, GoI (Member), and K P Krishnan, former Secretary, Ministry of Skill Development and Entrepreneurship (Member).

The idea of a separate board altogether was to assist the fintech unicorn develop long-term strategies, anticipating challenges and suggesting mitigation measures, especially in the context of regulatory and compliance processes, Razorpay had mentioned in a statement.

While fintech platform Slice roped in former RBI Executive Director Eugene Karthak and ex-SBI Managing Director S Vishvanathan as independent director and advisor, respectively, while banking veteran and former SBI MD B Sriram joined Cred’s board as an independent director in July last year.

BharatPe appointed former SBI chairman Rajnish Kumar and former RBI deputy governor BP Kanungo to its board.