Paytm says it has arranged a merger of deals start-ups Nearby and Little and made a 'strategic' investment in the resultant entity for a majority stake
New Delhi: Paytm on Wednesday announced the acquisition of Nearbuy and Little, two deals platforms that focus on local restaurants as well as commercial establishments.
In a statement, Paytm said it arranged a merger of the two well-funded start-ups and made a “strategic" investment in the resultant entity for a majority stake.
Sequoia Capital India, a large investor in Nearbuy (formerly Groupon India), continues to be a shareholder in the merged entity. Paytm did not say whether Sequoia sold a part of its investment in Nearbuy to Paytm.
Mint was the first to report the potential deal in September.
Nearbuy, which was founded as SoSasta, was acquired by NASDAQ-listed Groupon Inc. in 2011.
The company was later renamed as Groupon India, in 2013.
In 2015, Sequoia Capital India and the current chief executive officer (CEO) Ankur Warikoo bought a majority stake from the US-based parent of the firm and named it Nearbuy.
Little app (Little Internet Pvt. Ltd), on the other hand, was launched in 2015 with initial backing from Paytm, which wanted to test the waters in the hyperlocal deals business.
The app started with a $50 million investment from Paytm, SAIF Partners and Tiger Global Management (SAIF is also a large minority shareholder in Paytm).
Paytm, however, did not comment on whether it bought out SAIF and Tiger’s stake in Little app.
“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. I am sure consumers will love the greater selection and reach of everyday deals and discount offers," said Vijay Shekhar Sharma, founder and CEO of Paytm.
Paytm is set to benefit from the large number of merchant partnerships with both Nearbuy and Little and an even larger pool of potential customers.
The company also plans to cross-sell deals by Paytm merchants on Nearbuy as well as Little.
“Paytm’s strategic holding in Nearbuy-Little will provide Paytm’s merchant partners an opportunity to offer deals to acquire new customers and grow their business. Additionally, Paytm will serve its large consumer base by showcasing a large number of exciting deals on its platforms," the company said.
Over the past year, Paytm has aggressively expanded those categories in which its digital payments services are being used.
For instance, in July it acquired a majority stake in ticketing platform Insider.in to shore up event listings and have more users book events through Paytm.
Its current ecosystem spans use-cases including peer-to-peer payments, utility bill payments, travel bookings, hotels, movies and events, and e-commerce.