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Deepti Sri · · 1 min readReport: Indus OS investors take on PhonePe in legal battle over $60m acquisition deal
“A seemingly straightforward acquisition by PhonePe of homegrown content discovery platform Indus OS for about US$60 million has spiraled into a legal tangle as India’s second-largest fintech firm battles two existing investors for the five-year-old startup,” The Economic Times reported, citing court filings, regulatory disclosures, and three sources briefed on the matter.
Details:
- The two investors of Indus OS include mobile advertising firm Affle Global and Indian early-stage VC firm VenturEast. In a Singapore court, Affle has reportedly made an appeal on its right of first refusal (ROFR) against the sale of the stake belonging to Indus OS’ founder to PhonePe. PhonePe has called the development an “unfortunate bad faith stalling tactic.”
- However, a spokesperson for Affle Global said the company did not sign any binding term sheet with PhonePe or any Walmart-owned firm regarding the deal. Affle Global also allegedly held talks with VenturEast to buy the VC firms stake in Indus OS in an attempt to increase its voting rights.
Context:
- The legal battle comes days after reports surfaced about PhonePe’s acquisition of Indus OS in a US$60 million deal. Indus OS’ investors will supposedly exit the company, while its team, along with its founders, will join PhonePe.
- Affle Global claims it has poured in over US$20 million into Indus OS and owns a 20% stake in the firm. The company also said it has over 25% minority voting rights in Indus OS’ holding company, OSLabs.
Editing by Collin Furtado and Jaclyn Tiu
(And yes, we’re serious about ethics and transparency. More information here.)
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