PhonePe to acquire WealthDesk and OpenQ for about $50 million and $20 million respectively according to the sources. PhonePe has invested over $60 million on acquisitions as per the data analytics platform Tracxn
Bengaluru, NFAPost: Walmart-owned digital payments firm PhonePe is scaling up its financial services and wealth management services, and planning to make more acquisitions in this space.
The Bengaluru-based firm is set to acquire two wealth management firms for a total enterprise value of about $70 million as the firm plans to diversify its services, according to people familiar with the matter.
PhonePe will buy investment technology platforms, WealthDesk for about $50 million and OpenQ for around $20 million, according to sources.
Early this year, Phonepe applied to the Securities and Exchange Board of India (Sebi) for a mutual fund (MF) license, joining other fintech rivals with an intention to set up an asset management company (AMC).
PhonePe confirmed that it is acquiring WealthDesk and OpenQ, but didn’t reveal the value of the transaction.
PhonePe spokesperson stated PhonePe is acquiring WealthDesk. “The founder and the entire team will be working as a part of the PhonePe group and both the platforms will remain independent,” said a PhonePe spokesperson.
WealthDesk will continue to remain an open platform for all players, and the founder Ujjwal Jain will continue defining the vision for his company.
“WealthDesk currently has over 50 partners across categories already working with them and we expect their platform to scale further by integrating with more partners and to become a gold standard for investment technology,” said a PhonePe spokesperson.
WealthDesk’s vision is to create an internet-scale investment technology ecosystem by building the United Wealth Interface (UWI) for the Asset and Wealth Management ecosystem on top of broking/transactional platforms in India.
The interoperability offered by a common protocol like UWI through WealthDesk’s platform offerings powered by WealthBaskets and Embedded WealthDesk Gateway will allow all stakeholders in this ecosystem viz. brokers, AMCs, Investment Advisors, Research firms etc. to integrate with each other and push investment products innovation led by internet-scale distribution technology with network effects.
PhonePe spokesperson said PhonePe is also acquiring OpenQ, subject to necessary regulatory approvals.
“OpenQ is a smart beta wealth management platform, which designs investment strategies and optimal portfolio construction advice. Post-acquisition, OpenQ will be instrumental in creating the Wealth Ecosystem for the PhonePe Group,” said spokesperson PhonePe.
After digital payments, financial services have become the next big battleground for players such as PhonePe, Amazon, Google and Paytm. The size of the Indian financial services market could touch around $340 billion in the next few years.
PhonePe forayed into financial services in 2017 with the launch of gold providing users with a convenient option to buy 24-karat gold, and later launched silver on its platform. It has since introduced several Mutual Funds and Insurance products like tax-saving funds, liquid funds, international travel insurance, life insurance, and insurance for the Covid-19 pandemic.
PhonePe expects to get almost half of overall revenues to come from financial services. The company also had plans to tap merchant lending space, and stockbroking space and build an asset management company.
PhonePe has made three acquisitions and spent over $60 million on them, according to data analytics platform Tracxn. Key acquisitions include App Bazaar (May 2021) and Zopper Retail (Jul 2018). It has invested in multiple sectors such as mobile app distribution, internet first insurance platforms and in-store retail tech.
