Homegrown ecommerce major Flipkart announces its plan to partially spin off PhonePe, the digital payments platform in order to give it more room for growth using fresh funding. The company has announces that that PhonePe, which has been on an exceptional growth track over the last few years, will raise $700 million in primary capital.

In a statement, Kalyan Krishnamurthy, CEO of Flipkart Group, said, “Recognizing the momentum that has been achieved, as well as PhonePe’s significant growth potential, Flipkart’s Board determined that this was the right time to partially spin-off PhonePe so it can access dedicated capital to fund its long-term ambitions over the next three to four years.”

Commenting on the occasion, Sameer Nigam, Founder & CEO, PhonePe, said, “Flipkart and PhonePe are already among the more prominent Indian digital platforms with over 250 million users each. This partial spin-off gives PhonePe access to dedicated long-term capital to pursue our vision of providing financial inclusion to a billion Indians.”

Kalyan Further added, “As Flipkart Commerce continues to grow strongly serving the needs of Indian customers, we are excited at the future prospects of the group. This move will help PhonePe maximize its potential as it moves to the next phase of its development, and it will also maximize value creation for Flipkart and our shareholders.” PhonePe had recently announced its plan to file its IPO by 2023.