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Paytm nears Little acquisition; Nearbuy next on the radar

05 September, 2017

Digital wallet Paytm’s parent One97 Communications Ltd is in talks to buy out online deals startup Nearbuy to strengthen its hyperlocal play, according to media reports.

The development comes a day after VCCircle first reported that the fintech company is looking to acquire its investee firm and Nearbuy’s peer Little.

The news of Paytm’s interest in Nearbuy was first brought to light by the anonymous Twitter handle Unicon Baba on the first of this month.

Paytm’s possible acquisition of Little is in a fairly advanced stage with the latter’s board agreeing for the deal, a person familiar with the development told VCCircle. It wants to retain the current management of Little but no clarity on this has emerged yet.

While Paytm is already on track to merge Little with itself, it is separately pursuing the acquisition of Nearbuy.

Paytm wants to acquire both Little and Nearbuy as it wants to quickly ramp up its deal business. Given its reach, Paytm aspires to become the top player in the deals space, said another person. “Economies of the scale is the reason why Paytm wants to buy both the firms,” the person said.

Following a $1.4-billion infusion by Japan’s SoftBank, Paytm has been on a multi-pronged expansion drive, foraying into travel booking, movie-ticketing and other areas that align with its core competence of payments. It is also looking to step up its e-commerce business.

The move to buy out deals firms Little and Nearbuy reflects Paytm’s aggressive attempt to accelerate its mobile commerce play. Gurgaon-based Nearbuy features hyperlocal offers in segments such as food and beverages, spa, salons, wellness and getaways while Little is a mobile marketplace for offline deals, including restaurants, movies, hotels, salons, gyms and spas.

Paytm founder Vijay Shekhar Sharma, who sits on the board of Little, had earlier said that Little would power Paytm’s deals platform.

An email query sent to Paytm did not elicit a response.

Nearbuy was founded by Ankur Warikoo, Sumeet Kapur, Snehesh Mitra, Sachin Kapur, Ankur Sarawagi and Ravi Shankar. Earlier known as Groupon India, the company changed its name to Nearbuy, and bought its global parent’s (Groupon Inc.) stake, along with Sequoia Capital, to become an independent entity in August 2015. During the same time, Sequoia had infused $20 million in the firm for an undisclosed stake. Groupon Inc. is now a minority shareholder in the Indian company.

In September last year, Nearbuy raised venture debt worth Rs 15 crore from non-banking financial company BlackSoil Capital Pvt. Ltd.

Little, which was founded by Manish Chopra and Satish Mani, had raised $50 million from One97Communications, SAIF Partners, Tiger Global and Singapore’s GIC in July 2015.

Chopra and Mani had earlier co-founded fashion marketplace Zovi. Though the fashion portal raised funds from Tiger Global and SAIF Partners, it scaled down operations by mid-2016. Meanwhile, Little has been expanding through a string of acquisitions.

It bought Chandigarh-based curated deals marketplace Trideal in October 2015. Early this year, it acquired online salon marketplace Stylofie.

Last year, Noida-based One97 had separated its e-commerce and payments businesses under Paytm E-Commerce Pvt. Ltd and Paytm Payments Bank Ltd, respectively. In June, Paytm E-Commerce received a funding of $200 million from Alibaba and venture capital firm SAIF Partners.

Since then, it has made a number of investments and acquisitions. It has also initiated internal movements and formulated fresh business strategies. For example, it has transferred over 800 employees from parent company One97 Communications to Paytm E-Commerce which runs online shopping platform Paytm Mall.

Paytm E-Commerce, which is majority-owned by China’s Alibaba Group Holdings Ltd, plans to hire 2,000 more employees to scale up operations. It is also ramping up its partner network by adding 3,000 agents across the country.

Paytm, which typically puts $5-7 million in startups, has backed about 25 startups so far, its latest bet being mobile data analytics venture Mobiquest. The startup’s flagship product, M’loyal, offers a self-served mobile-enabled loyalty, analytics and campaign management platform to brands across sectors including retail, food and beverage, fashion, malls, health and wellness and hospitality.

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Paytm nears Little acquisition; Nearbuy next on the radar

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