PhonePe is in talks to acquire the PoS software as a service (SaaS) platform Zopper, backed by Tiger Global. The terms of the deal are not yet ascertained yet but a formal announcement regarding the acquisition might happen in a week.
PhonePe is a digital payments platform, founded by Sameer Nigam and Rahul Chari in 2015 with its headquarter in Bengaluru. It was later acquired by Flipkart in 2016.
Zopper was founded by Neeraj Jain and Surjendu Kuila in 2010. It started as a product review website which was later transformed into a hyperlocal e-commerce platform. Later in 2015-2016, Zopper split its business into Zopper retail and Zopper Assure.
Zopper retail is the PoS software as a service platform for offline merchants and Zopper Assure is the platform that provides extended warranty for electronic products purchased offline. Zopper retail generates up to 45% of the total revenue generated.
Institutional investors like Tiger Global, Nirvana Ventures, and Blume Ventures helped Zopper raise about $20 million in its last known funding back in 2015.
Acquisition of Zopper makes sense for PhonePe as it is a UPI based digital platform and this acquisition can help PhonePe increase its offline customer base, whereas its customer base has been limited to the online users as of now. Although there has been no confirmation from either Zopper or PhonePe team about the acquisition. There is a lot to gain for both these players from the acquisition.
PhonePe has raised nearly 500 crores ($80 million) from its parent company, Flipkart and is looking to expand its user base by this acquisition. Zopper has also added more than 15,000 users after it acquired the EasyPOS, a cloud-based POS software maker.
PhonePe has a lot of competitors in digital payments space like Google Tez and MobiKwik, Paytm who have an established user base. It makes sense to start looking at the offline option rather than crowding the already saturated online payments market.