PremiumBengaluru-based payments major, PhonePe is in final stages to acquire homegrown app store IndusOS for a cash-deal worth $60 million, according to two individuals aware of the discussion.
The acquisition will give an exit to IndusOS’s existing investors including Omidyar Network, Samsung Ventures, VenturEast among others, with the final terms of the deal to be finalised over the course of next month, said one of the individuals quoted above.
Premium Premium 
Premium Premium This will be PhonePe’s second and largest acquisition till date, which was recently valued at $5.5 billion last year, after a $700 million fund infusion led by US-retailer Walmart. PhonePe had acquired point-of-sale (PoS) software service provider, Zopper Retail back in 2018 to strengthen its offline play.
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 individuals said.
This will help the payments major to inorganically increase the offerings of PhonePe Switch, which allows users to order groceries, food and book cabs, on its platform, without the need of downloading an external app. PhonePe launched its Switch platform in June 2018.
Further, PhonePe charges a commission on the revenues from the business generated through the ‘Switch’ platform from app partners.
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 more than $25 million from a clutch of investors, since inception.
“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, PhonePe 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 finalised yet," said one of the above quoted individuals, on condition of anonymity.
In September, last year, IndusOS claimed that it has more than 100 million users on its App Bazaar platform, with more than 400,000 apps listed across English and 12 other Indian regional languages, on its app store.
In contrast, PhonePe has 280 million registered users, of which 110 million are monthly active users of the platform, according to its recent estimates.
As a part of the acquisition, IndusOS’s 100-member technology and product team is expected to join PhonePe, said the second person. The person also said that IndusOS will continue its partnerships with OEMs, after the acquisition.
Currently, IndusOS claims to have direct partnerships with more than nine OEMs including Samsung, Micromax amongst others, and even powers Samsung’s default app store - Galaxy Store.
PhonePe did not respond to Mint’s queries, while IndusOS couldn’t be reached immediately for a comment.
News portal Entrackr first reported the development on Wednesday afternoon.
Digital payment fintechs including PhonePe, Google Pay, Razorpay and Paytm have all turned to a ‘super-app’ strategy over the past years, in a bid to increase utility and boost commerce on their respective platforms.
In October, last year, Noida-based digital financial services major, Paytm announced the launch of its mini-app store, to challenge Google’s growing dominance over the Indian technology ecosystem. The company also earmarked ₹10 crore for the app developers on its platform.Subsequently, even business payments provider Razorpay announced its app store for small and medium enterprises in December 2020.
Never miss a story! Stay connected and informed with Mint. Download our App Now!!
