Digital payments and financial services platform PhonePe said on May 18 that it would acquire wealth tech platforms WealthDesk and OpenQ as it continues to expand its financial services play beyond payments.
While the company did not disclose the deal’s value, Moneycontrol learned that the acquisitions amount to around $70 million, according to people aware of the development.
“PhonePe is acquiring WealthDesk (Wealth Technologies & Services Private Limited). The founder and the entire team will be working as a part of the PhonePe group, and both the platforms will remain independent,” the company said in a statement.
“PhonePe is also acquiring OpenQ (Quantech Capital Investment Advisors Private Limited), subject to necessary regulatory approvals. OpenQ is a smart beta wealth management platform that designs investment strategies and optimal portfolio construction advice. Post-acquisition, OpenQ will be instrumental in creating the Wealth Ecosystem for the PhonePe Group,” the statement added.
While PhonePe enjoys a majority share of 47 percent in monthly Unified Payments Interface (UPI) transactions, the company’s co-founder and CEO Sameer Nigam have said that the company wants to become a financial services group.
UPI and RuPay debit cards fall under the zero-MDR policy, which mandates that merchants should not be levied any charge on accepting payments via this mode. MDR or merchant discount rate is a crucial source of revenue for the payments ecosystem.
With no revenues from UPI, it acts as a customer acquisition funnel for PhonePe for its other financial services offerings, including mutual funds, insurance, and gold investments, among others.
PhonePe added that WealthDesk would continue to remain an open platform for all players, and founder Ujjwal Jain will continue leading the company. The company is a business-to-business-to-consumer (B2B2C) investment technology platform for stakeholders in the asset, advisory, broking, and wealth management ecosystem.
“WealthDesk’s vision is to create an internet-scale investment technology ecosystem by building the United Wealth Interface (UWI) for Asset and Wealth Management ecosystem on top of broking/transactional platforms in India. WealthDesk’s platform offerings will allow all stakeholders in this ecosystem to integrate and push investment products innovation,” PhonePe said.
WealthDesk has 50-plus partners across categories working with them. PhonePe expects the platform to scale further by integrating with more partners.