Digital payments and financial services player PhonePe said on July 29 that it has completed the long pending acquisition of mobile platform OSLabs after reaching an amicable settlement with the company's majority shareholder Affle Global Pte Ltd.
As part of the deal, PhonePe acquired Affle Global's entire stake at a premium. It, however, not reveal the final valuation at which the deal was reached.
IndusOS' 100 employees, including founders Akash Dongre, Rakesh Deshmukh, and Sudhir Bangarambandi will be part of PhonePe, which now owns 100 percent stake in the company after the all-cash deal.
The closure of the deal comes after a long-winding legal wrangle between PhonePe and IndusOS shareholders Affle and Ventureast Fund on the valuation of IndusOS. Walmart-owned PhonePe was close to acquiring IndusOS in May 2021, at a valuation of $60 million.
However, Affle which is the largest shareholder in IndusOS, took objection to the deal and filed an injunction at Singapore International Arbitration Center (SIAC) against PhonePe, saying it has the Right of First Refusal (RoRF). As per Affle, the true valuation of IndusOS stood at $90 million and it was unwilling to sell its majority stake at a lower valuation. PhonePe too filed a case against Affle and Ventureast at the SIAC.
On April 13, PhonePe, Affle and Ventureast Fund revealed that the three parties have decided to opt for an out-of-court settlement to close the deal.
Indus OS, founded in 2007, has raised about $20 million so far from Samsung Ventures, Omidyar Network and Snapdeal founders Kunal Bahl and Rohit Bansal among others.
"We are very excited to embark on this journey with OSLabs, and build just the kind of the localised App store that India needs," Sameer Nigam, Founder and CEO of PhonePe, said.
With the closure of this deal, PhonePe can build a horizontal, local app store.
"We wish PhonePe team the very best for its stated vision of building a homegrown horizontal, local Appstore," Mei Theng Leong, Director of Affle Global, said.
PhonePe, which is a leader in the Unified Payments Interface (UPI), has plans for IndusOS to work with PhonePe’s Switch -- a service which enables multiple apps such as Ola, redBus, Goibibo, Myntra, Delhi Metro, and Grofers on a single platform.
PhonePe's interest in Indus OS comes from the distribution play since Indus OS has over 100 million users and over 4 lakh apps on its own app marketplace called App Bazaar. Indus OS has partnered with 12 mobile brands in India and powers Samsung’s default app store - Galaxy Store.
Indus OS' App Bazaar has over four lakh apps available in 12 Indian languages, and the platform has seen over a billion app installs since 2019. PhonePe itself runs its own 'super app' platform Switch to offer users access to popular consumer internet apps on its platform.
