Vijay Shekhar Sharma-led Paytm has announced the merger between Little and Nearbuy to create the largest online deal discovery platform in India. The mobile wallet and ecommerce major will hold a majority stake in the merged entity, the company said.
The announcement comes barely three months after VCCircle had first reported Paytm’s move to acquire its investee company, Little.
Paytm held parallel discussions with Little’s rival Nearbuy. It feels that the deal discovery platforms are aligned well with its core payments business and could accelerate mobile commerce and transactions.
The company said the merger will strengthen Paytm’s presence in the offline commerce space. “This combination of Nearbuy and Little marks a great opportunity for us to reinforce our commitment to support small and large retailers in the new age of mobile commerce and payments,” Paytm founder and CEO Sharma said.
Paytm and its early backer SAIF had invested $50 million to help Little co-founders Manish Chopra and Satish Mani to build the startup two years ago.
Sharma as well as SAIF’s partner managing director Alok Goel are on Little’s board. SAIF, according to sources, was actively involved in this transaction.
Nearbuy, formerly Groupon India, was founded by Ankur Warikoo, Sumeet Kapur, Snehesh Mitra, Sachin Kapur, Ankur Sarawagi and Ravi Shankar. The company changed its name to Nearbuy, after buying a large chunk of its global parent, Groupon Inc.’s stake, in a transaction that also saw Sequoia Capital pumping in money. It became an independent entity in August 2015. Sequoia had infused $20 million in the firm for an undisclosed stake. Groupon Inc. is now a minority shareholder in the Indian company.
All the existing shareholders of Nearbuy, including Sequoia India, will have stakes in the merged entity, Paytm said in a press note. However, it remains silent on Little’s existing shareholder Tiger Global’s position after the merger.
“This partnership will further strengthen Paytm’s offerings for offline merchants by enabling them to acquire new customers through deals. Nearbuy and Little work with over 40,000 small and large merchants across the food, beauty and travel categories, besides others,” the company added.
SoftBank- and Alibaba-backed Paytm, which has carved out a payment bank and an ecommerce vertical, besides its flagship mobile wallet, has been on a multi-pronged expansion drive fuelled by $1.4 billion fund infusion earlier this year. It has forayed into travel booking and movie-ticketing, besides other segments that are aligned with its core payments business. It is also looking to step up its e-commerce platform.