Digital payments major PhonePe is in talks to acquire homegrown content and app discovery platform Indus OS in a deal valued around $60 million, sources aware of the matter said.
Bengaluru-based PhonePe’s rationale for acquiring Indus OS is to boost its ‘super app’ Switch, where it hosts apps across categories such as food, travel, shopping and lifestyle. A super app is simply a platform that offers a wide range of services under one umbrella.
Local developers use Indus OS to reach non-English speakers beyond India’s tier 1 cities and allow them to consume content in the language of their choice. The acquisition is therefore expected to help PhonePe tie up with more local developers for increased in-app engagement. News portal Entrackr was the first to report on the acquisition.
The deal will also help PhonePe bring a wider array of apps to the Switch platform and strengthen its reach, especially through existing partnerships between Indus OS and original equipment manufacturers such as Samsung. This is PhonePe’s second acquisition after it bought point-of-sale startup Zopper in 2018. A PhonePe spokesperson declined to comment.
Phone Pe and Indus OS are currently finalising the details of the acquisition, including the composition of the team. “There are still a few things to be decided on how things will be executed after the acquisition and the team structure. But it should close in the next month or two,” said the source cited earlier.
Indus OS was founded by three IIT alumni, Rakesh Deshmukh, Akash Dongre and Sudhir Bangarambandi, in 2015. The company operates a local Android app store called the Indus App Bazaar, which offers apps and content in over a dozen Indian languages. The company claims it hosts more than four lakh apps and caters to more than 100 million users across India.
PhonePe is India’s leading third-party processor of Unified Payments Interface (UPI) payments. In April, it processed 1.19 billion UPI transactions worth Rs 2.34 lakh crore, cornering nearly 45% of the market.
While PhonePe also has made forays into the financial intermediary and merchant management businesses, taking on the likes of Paytm, Amazon and Google, its core ambition is to create a payments super app. ET last month reported that it has also applied for a brokerage license.
Flush with funds after a massive $700 million funding round led by Walmart in December, PhonePe has been aggressive with its marketing and customer acquisition initiatives in 2021 to corner a larger share of India’s growing digital payments market. PhonePe was valued at $5.5 billion in the round, making it India’s second most valuable fintech after Paytm.
“We are not slowing down our marketing plans for the year,” Sameer Nigam, chief executive of PhonePe, recently told ET. “We have said in the past that our vision is to get the next 500 million users to the digital payments fold, and we will continue to work on reaching that number.”
Bengaluru-based PhonePe’s rationale for acquiring Indus OS is to boost its ‘super app’ Switch