PhonePe has reached an out-of-court settlement with investors disputing the mobile wallet firm’s acquisition of Indus OS, the former announced in a late Wednesday evening statement.
“The settlement of the dispute involving VPF [Ventureast Proactive Fund] shares in Indus OS is a significant step towards a greater outcome for Indus OS and its stakeholders,” the statement, provided to news outlets by a PhonePe spokesperson, said. The statement came minutes after a story broke on the Economic Times of a Singapore court rejecting an investor’s case against the deal.
The dispute involved two shareholders of Indus OS’s parent company, Affle Global and Ventureast. The $60 million acquisition (which Entrackr was the first to break) saw a setback in May last year when both these investors approached the High Court of Singapore (the lower division of Singapore’s Supreme Court) to request an injunction on the deal.
PhonePe reacted to the legal actions by filing a complaint with the Securities and Exchange Board of India, accusing the minority shareholders of “side dealing” to obstruct the acquisition of the Rakesh Deshmukh-led firm. Affle argued in a statement that PhonePe was lowballing Indus OS’s value, effectively undermining their bet on a valuation that was 50% higher than what PhonePe was paying for the company.
The settlement — the terms of which were undisclosed — clears the way for PhonePe to acquire Indus OS, which provides content discovery services ultimately aimed at Indian smartphone users. The joint statement mentions Samsung, which runs the Galaxy App Store, a significant Google Play Store competitor, with Indus OS’s help. The firm works with other OEMs too, and says its services are part of 200 million smartphones. The statement argues, curiously enough, that initial resistance to the deal was inevitable, but that “subsequent maturity of vision and leadership by all parties” prevailed.