The Enforcement Directorate (ED) has filed a complaint against buy-now-pay-later (BNPL) platform Simpl and its cofounder and director Nitya Sharma, citing alleged violations of Foreign Direct Investment (FDI) regulations amounting to ₹913.75 Cr.
According to an official statement from the agency, the case has been filed under Section 16(3) of the Foreign Exchange Management Act (FEMA), 1999, following an investigation into foreign investments made in Simpl’s parent company, One Sigma Technologies Pvt Ltd.
The ED said it initiated the probe based on credible information that Simpl had received a substantial amount of foreign funding from the United States in breach of FDI guidelines. The investigation revealed that One Sigma Technologies received ₹648.87 Cr as FDI and issued convertible notes worth ₹264.88 Cr.
The agency has alleged that the company had classified its business activity as “benefits of information technology and other computer service activities”—a category that qualifies for automatic FDI approval. However, the ED claims that Simpl’s actual line of business involves financial services, which requires prior government approval for receiving FDI or issuing convertible notes, especially if not regulated by a financial authority.
As per ED’s findings, the startup failed to obtain such approvals before proceeding with these investments.
“M/s One Sigma Technologies Pvt Ltd (SIMPL) has received FDI under automatic route and issued convertible notes under automatic route without obtaining prior approval from the Government of India and thereby contravened the provisions of FEMA, 1999 collectively to the tune of INR 913,75,88,062/- and rendered itself liable to be proceeded under section 13 of FEMA, 1999. In view of the above, a complaint u/s 16 (3) of FEMA, 1999 is filed before the adjudicating authority under FEMA,” the ED said in its statement.
Founded in 2015 by Sharma, Simpl offers users the ability to make purchases from partner merchants and pay later—typically within a 15-day cycle. Rather than issuing credit directly, it operates as a payments intermediary and earns revenue by charging merchant fees. The platform claims to serve over 7 million users.
To date, the company has raised over $83 Mn in funding from investors such as Green Visor Capital, IA Ventures, and Valar Ventures. However, Simpl has faced mounting challenges, including high cash burn and financial losses. In FY23, it posted a loss of ₹356.6 Cr on ₹87.3 Cr in operating revenue. Financial results for FY24 and FY25 are yet to be disclosed.
In 2023, the startup also laid off over 100 employees in a bid to cut costs and move towards profitability, though recent updates on progress remain unavailable.
This marks the second major enforcement action by the ED in a single day. Earlier, the agency also filed a FEMA complaint against fashion ecommerce company Myntra and its affiliates for alleged FDI rule violations amounting to ₹1,654.4 Cr.
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