PhonePe to acquire IndusOS for $60 million

Leading payments company PhonePe is close to acquiring homegrown app store IndusOS for $60 million in cash, two people aware of the discussions said.

The acquisition will give an exit to IndusOS’s existing investors including Omidyar Network, Samsung Ventures and VenturEast, one of the persons said, adding the terms of the deal will be finalized in June.

This will be the second and largest acquisition for PhonePe, which acquired point-of-sale software service provider Zopper Retail in 2018 to strengthen its offline business. PhonePe was valued at $5.5 billion last year, after a $700 million fund infusion led by US retailer Walmart.

Through the current acquisition, PhonePe is expected to leverage IndusOS’s indigenous app store, App Bazaar, and will look at a possible integration with its own in-app platform, PhonePe ‘Switch’, the persons cited above said, on condition of anonymity. This will help PhonePe increase the offerings of PhonePe Switch, which allows users to order groceries, food and book cabs on its platform, without having to download an external app.

PhonePe launched Switch in June 2018. The company charges a commission on the revenues from the business generated through the ‘Switch’ platform from app partners.

News portal Entrackr first reported the development on Wednesday.

“PhonePe may look at a possible integration between its in-app store ‘Switch’ and IndusOS’s App Bazaar to increase the host of applications it offers on its platform. Additionally, it may also list its app on the App Bazaar platform, which has integration with original equipment manufacturer (OEM) Samsung. This may increase PhonePe’s reach to a wider audience. However, the workings of the integration aren’t finalized yet,” one of the persons cited above said, on condition of anonymity.

Founded in 2015, IndusOS provides an Android-based app store App Bazaar, which allows developers to list their apps on its platform and enables first-time internet users to discover and access new content in vernacular and regional languages. The company has raised over $25 million from a clutch of investors, since inception.