By
Paytm snaps up Flipkart- and Tiger Global-backed Cube26
Photo Credit: Shah Junaid/VCCircle

One97 Communications Ltd, the parent of digital payments firm Paytm, has acquired Delhi-based mobile technology startup Cube26 Software Pvt. Ltd to improve consumer engagement experience.

The Cube26 team will help add more social engagement features to Paytm's products and services, Paytm chief financial officer Madhur Deora said in a statement.

The financial terms of the deal were not disclosed.

“We are focused on building a more immersive and feature rich mobile experience for our large active user-base,” Deora said.

The acquisition marks Paytm’s second buyout within two months. Last month, it bought Chennai-based Orbgen Technologies Pvt. Ltd, which runs online ticketing platform TicketNew and was backed by common Chinese investor Alibaba Group.

Cube26 was founded in 2012 by Saurav Kumar, Aakash Jain and Abhilekh Aggarwal. It wasn't immediately clear if they will join Paytm. It is also not clear whether Cube26 will continue to exist as a separate brand; the company's website is not functional anymore.

Last year, Cube26 had closed its Internet of Things business.

It is also not clear whether e-commerce firm Flipkart and US-based venture investor Tiger Global got an exit through the latest transaction. Cube26 had raised Rs 50 crore in seed funding from the two companies in October 2015. Tiger Global is already exiting Flipkart as part of a deal where US-based Walmart Inc. is acquiring the Indian e-tailer.

Separate email queries sent in this regard to both Paytm and Cube26 founders did not elicit a response till the time of filing this report.

Cube26 developed applications across usability for original equipment manufacturers and had 10 patents to its credit, including ‘Blink to Capture’ for selfies. It has worked with the likes of Flipkart, Myntra and other e-commerce companies for customer acquisition.

Cube26 also worked with mobile phone makers including Micromax, Panasonic and Karbonn to customise mobile operating systems for users and create gesture-based controls.

Paytm, founded by Vijay Shekhar Sharma, started off as a mobile recharge platform. But it has diversified to become a digital payments and e-commerce company. It has also started a payments bank.

It operates these businesses through separate entities and has raised funding from the likes of Japan's SoftBank Group Corp, Alibaba and SAIF Partners.

For the financial year ending March 2017, One97 Communications registered a wider operating loss as it continued to burn cash heavily. Its consolidated loss before exceptional items, interest, tax, depreciation and amortisation expanded to Rs 1,304 crore from Rs 1,204.6 crore the previous year.

Consolidated revenue rose 35% to Rs 640 crore from Rs 474 crore the previous year. However, net loss shrank to Rs 899.60 crore from Rs 1,496.80 crore.

Leave Your Comment(s)