ED Charges FEMA Complaint Against Simpl Over ₹913 Crore FDI Violation

The Enforcement Directorate (ED) has filed a complaint against fintech startup Simpl and its co-founder, Nitya Sharma, for alleged violations under the Foreign Exchange Management Act (FEMA), 1999. As per news reports, the total amount involved is ₹913.75 crore.

Nature of Alleged Violation

Simpl, registered as One Sigma Technologies Pvt Ltd, reportedly received foreign investment without mandatory approvals. The company classified its business as IT services to access the 100% automatic FDI route, but operates in financial services, which require government approval under FEMA rules.

According to the ED, Simpl raised ₹648.87 crore through foreign direct investment and issued ₹264.88 crore worth of convertible notes. Both were obtained without prior clearance from the government, as required for financial service activities not regulated by a financial authority.

The complaint has been filed under Section 16(3) of FEMA. ED stated that issuing convertible notes without government approval for activities needing such clearance constitutes a contravention of Section 13 of the Act.

Startup Profile and History

Founded in 2015, Simpl offers a buy-now-pay-later service. It partners with around 26,000 merchants, including Zomato, BigBasket, and MakeMyTrip. The platform allows users to pay later for purchases, usually within 15 days, and earns revenue from merchant fees.

Simpl Funding Background

Simpl raised $40 million in a Series B round in 2021, led by Valar Ventures and IA Ventures. The company has raised over $83 million in total. It reported a loss of ₹356.6 crore on ₹87.3 crore in revenue for FY23. Financials for FY24 and FY25 are yet to be filed.

Read More: Myntra Faces ₹1,654 Crore FEMA Complaint from ED Over FDI Breach!

Simpl Operational Challenges

In 2024, Simpl undertook 2 rounds of layoffs, affecting over 200 employees, including mid-senior level roles. The company cited rising costs and slower user growth as reasons for the restructuring.

This is the 2nd such case filed by the ED on July 24, 2025. Earlier, it also registered a complaint against Myntra for alleged FDI violations amounting to ₹1,654.4 crore.

Conclusion

The complaint has been filed under FEMA, and the case is currently before the adjudicating authority. A response from the company or its founder is still awaited.

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