PhonePe's Indus OS acquisition clears legal hurdles

New Delhi: Walmart and Flipkart-owned PhonePe, homegrown Indus OS, Affle Global Pte Ltd (AGPL) and Ventureast Proactive Fund II (VPF) on Wednesday announced they have settled the dispute involving VPF shares in Bengaluru-based startup Indus OS, clearing the way for its acquisition by PhonePe.

"The joining of many important forces (Indus OS Founders, PhonePe, Samsung and AGPL) would anchor Indus OS in the next part of its value creation journey," the companies said in a statement. Indus OS was founded by IITians Rakesh Deshmukh, Akash Dongre, and Sudhir Bangarambandi in 2015.

The company is known to make innovative products like Indus App Bazaar. PhonePe acquired homegrown Indus OS for $60 million (roughly Rs 438 crore) in May last year. According to the companies, Ventureast played a key role in the initial stages of bringing in angel investors and VC investors even before they were an investor, and subsequently was the investor who backed Indus OS in maximum number of rounds.

"AGPL has delivered strategic value creation and sustainable growth. Now with PhonePe's involvement last year, and the long-term alignment of the founders, PhonePe, AGPL and Samsung that is coming about now, the value accretion may be huge for all stakeholders including the entrepreneurs and consumers in India," the companies said.

The news came as Singapore High Court had also dismissed appeals filed by Affle, a shareholder of Indus OS. With over 360 million registered users, one in four Indians are now on PhonePe. The company said it has digitised over 27 million offline merchants spread across Tier 2,3,4 and beyond.

PhonePe forayed into financial services in 2017, providing users with a safe and convenient option to buy 24-karat gold, and has recently also launched silver on its platform.