BNPL startup Simpl under ED scanner over Rs 913 crore FDI violation
25 Jul 2025, 12:17 PMThe ED has filed a complaint against Simpl and its founder Nithya Nand Sharma for allegedly violating FEMA provisions.
Team Head&Tale
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The Enforcement Directorate (ED) has filed a complaint under the Foreign Exchange Management Act (FEMA) against One Sigma Technologies Pvt Ltd, which operates the buy-now-pay-later (BNPL) app Simpl, and its director Nithya Nand Sharma for contraventions to the tune of Rs 913.76 crore.
The ED, in its release, said that the complaint was triggered on the basis of a "credible information that Simpl has received a substantial amount of foreign direct investment (FDI) from the United States, allegedly in violation of the extant FDI Policy."
Simpl, according to the ED, has received Rs 648.87 crore in FDI and raised an additional Rs 264.88 crore via convertible notes, treating both investments under the 100% automatic route. The company declared its business activity as "Benefits of Information Technology and other computer service activities."
During the course of investigation under FEMA, business model and revenue generation model of Simpl were examined and the same revealed that the company is into the business activities which fall under financial activities. However, as per the rules, FDI in financial activities not regulated by any authority is to be brought under 100% approval route, and not the automatic route.
"One Sigma Technologies Pvt Ltd has issued convertible notes without obtaining any approval from the Government of India," the ED stated.
With this, Simpl allegedly violated FEMA provisions. The contravention collectively is to the tune of Rs 913.76 crore.
The complaint has now been submitted to the adjudicating authority.
Simpl last raised $40 million in a Series B round in 2021, led by Valar Ventures and IA Ventures. The BNPL platform has raised over $80 million till date.
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