Walmart-Backed PhonePe To Acquire WealthDesk And OpenQ For $75 Mn

Walmart-backed digital payments platform PhonePe will acquire two wealth management startups–WealthDesk and OpenQ for $75 Mn in aggregate.

As per a Bloomberg report, PhonePe will acquihire WealthDesk for about $50 Mn while OpenQ will be bought at $25 Mn. 

As per the deal, WealthDesk’s founder–Ujjwal Jain and the team will join the PhonePe group. However, the two platforms will continue to work independently. Moreover, Jain will continue to lead WealthDesk and the startup (WealthDesk) shall continue working as an open platform for all users. 

According to the statement, OpenQ’s acquisition is subject to regulatory approvals. Further, the statement said, post finalising the deal, OpenQ will significantly help create a wealth ecosystem for the PhonePe group.  

The latest development comes after PhonePe raised about $297 Mn from its Singapore-based parent entity. On March 23 and March 24 this year, PhonePe passed two resolutions to allot a cumulative of 2.5 Mn of equity shares to PhonePe Singapore in order to raise money. 

Founded in 2016, the Mumbai-based WealthDesk is an online wealth management platform that develops the unified wealth interface (UWI) for the asset and wealth management ecosystem. The interface is developed through an Embedded WealthDesk Gateway (EWG) and enables investors to invest across mobile apps as well as websites via their broking accounts.

It claims to have over 50 partners working across categories. It is looking to grow further by integrating with more partners. 

In June 2022, WealthDesk closed its Pre-Series A funding round at $3.2 Mn. The second tranche of the round was raised from former Blackstone partner and co-head (India), Mathew Cyriac, in his personal capacity while the first tranche was raised from individual investors including senior leaders from global banks, market participants and other top corporates in January last year. 

Founded in 2018 by Ujjawal Jain and Sujit Modi, the Mumbai-based OpenQ is an online wealth management platform that offers factor-based equity index, thematic investment products, trading baskets, asset allocation and investment analytics services to institutional as well as retail investors.

By acquiring these two startups, PhonePe is following in the footsteps of Amazon and Google. While Amazon participated in the fintech startup smallcase Technologies’ $40 Mn funding round, on the other hand, Google has joined hands with major Indian banks to offer online loans to consumers. 

According to a report, India is anticipated to become the fourth largest private wealth market globally by 2028. The country’s private wealth market will touch INR 95 Tn ($1.26 Tn) while investor accounts will grow over 3X to reach 130 Mn by 2025.

Another report by Invest India states that the Indian investment tech market is estimated to touch over $60 Bn by FY25, from its current market size of $20 Bn. At present, India has the highest fintech adoption rate at 87% against a global average of 64%.

Some of the key players in the investment tech industry are AssetPlus, UpStox, Scripbox, and Groww.