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Flipkart-owned digital payments major PhonePe has announced acquisition of 100 per cent stake in OSLabs, which built the Indus App Bazaar, the Indian alternative to big tech-controlled app stores. While the companies did not disclose the acquisition deal value, a PhonePe spokesperson told BusinessLine that it is an all-cash deal.
She added that the founders of OSLabs and its 100 employees will join PhonePe after the acquisition. PhonePe has been in talks to acquire OSLabs for $60 million since May 2021. However, the deal was not completed on account of the objection raised by existing investors, Affle Global and Ventureast.
The existing investors had valued Indus OS at $90 million, while PhonePe had offered $60 million to acquire about 90 per cent stake. Since then, the deal has been in a legal tussle. The companies said in a joint statement on July 29 that PhonePe, AGPL (Affle Global) and OSLabs had reached an amicable settlement in the matter, with PhonePe acquiring AGPL’s entire stake at a premium. According to a source close to the development, all legal disputes in the matter have been resolved.
In April 2022, PhonePe, Indus OS, Affle Global and Ventureast Proactive Fund II had opted for an out-of-court settlement in the case surrounding the acquisition of Indus OS by PhonePe. With the closure of this deal, PhonePe will pursue its vision for building a homegrown horizontal, local Appstore, while AGPL gets a premium on its original investment.
Commenting on the acquisition, Sameer Nigam, Founder and CEO PhonePe said, ’’We are excited to embark on this journey with OSLabs, and build the kind of localised App store that India needs.’’ Mei Theng Leong, Director of AGPL said, ”We are happy that the matter has been amicably settled for all entities. We wish the PhonePe team the very best for its vision of building a homegrown horizontal, local Appstore. ’’
Boost for super-app ambitions
This acquisition is a boost to PhonePe’s super-app ambitions. A super-app is one that offers a slew of services such as payments, messaging, online shopping, grocery delivery, etc, on one platform and at least two of these services are used frequently by the app users.
PhonePe will integrate lakhs of localised Indian apps from Indus App Bazaar to its PhonePe Switch, which already has some mini apps integrated. Started as a digital payments company, PhonePe forayed into financial services in 2017, providing users with an option to buy 24-karat gold, and recently also launched silver on its platform.
Since then, PhonePe has introduced several Mutual Funds and insurance products like tax-saving funds, liquid funds, international travel insurance, life insurance, Covid-19 insurance, amongst others. Using PhonePe, users can also send and receive money, recharge their mobiles, DTH, pay at stores and make all their utility payments.
Founded in December 2015, PhonPe has 390+ million registered users and has digitised 30+ million offline merchants spread across Tier 2,3,4 and beyond. With domestic companies such as Reliance and Tata aiming to become large tech-focused ecosystems, India has become a competitive market in the super-app space. Tata launched its super-app Tata Neu on April 7.
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