PhonePe To Acquire Indus OS After Affle, Ventureast Opt For Settling Out Of Court
- ByStartupStory | April 15, 2022
Walmart-backed payments startup PhonePe has achieved an out-of-court settlement with investors in the company who were delaying the deal nearly a year after it announced the acquisition of a large majority stake in indigenous app marketplace Indus OS. As part of the acquisition, PhonePe valued Indus OS at $60 million. Early investors in Indus OS, such as Omidyar Network and Ventureast, were expected to benefit from the deal. Indus OS was also invested in by Affle Global Pte (AGPL) in 2020, with a 25% share in the company.
According to the statement said by PhonePe, The coming together of a number of major forces (Indus OS Founders, PhonePe, Samsung, and AGPL) will help Indus OS go forward in its value-generating journey. Without the early struggle, and the subsequent maturity of vision and leadership by all stakeholders, the strategic confluence of parties and long-term alignment could not have been achieved.
The problem began when Ventureast Proactive Fund-II (VPF) and AGPL filed an injunction against the deal with the Singapore High Court. PhonePe, according to AGPL, devalued Indus OS, which it believes should be valued at $90 million. While PhonePe purchased 32 percent of the company from other investors, AGPL refused to sell its shares to PhonePe at a low price.
PhonePe had filed a complaint in Singapore courts against Affle and Ventureast, both Indus OS investors, alleging that the companies had kept PhonePe in the dark about Ventureast selling its shares in OSLabs, the parent company of Indus OS, to Affle. PhonePe has also filed a complaint with SEBI, the stock exchange regulator, alleging that VPF’s tactics are illegal and unethical.
Indus OS, founded in 2015 by IIT Bombay grads Rakesh Deshmukh, Akash Dongre, and Sudhir B, provides its phone brand partners with a local language app store called Indus App Bazaar. The app store, which has a large user base in Tier 2 and 3 cities, will complement PhonePe’s Switch function, which allows users to switch from the payment app to their chosen restaurant, grocery, or utility app within PhonePe. For transactions performed through Switch, Phonepe charges a commission to its app partners.
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