Shopclues, the newest member of India’s billion-dollar valuation club, is in advanced talks to buy payments startup Momoe, according to three people familiar with the development, as part of the online retailer’s ambitious acquisitions-led growth plans. The acquisition of Momoe, if it fructifies, will help Shopclues strengthen its payments backend for its fast-growing merchant base that’s largely concentrated in India’s small cities and towns where patchy internet access can make digital transactions difficult. The Bengaluru-based payments firm, however, has multiple term-sheets and was in negotiations with other suitors as well, according to a source in the payments industry. Momoe chief executive Utkarsh Biradar said the company had not reached an agreement with Shopclues. On speculation that Shopclues was negotiating to buy Momoe for $10-12 million (.`67-80 crore), mostly in stock, Biradar said that was inaccurate. A Shopclues spokesperson declined to comment. Momoe was founded in April 2014 by Biradar, Karthik Vaidyanathan, Ganesh Balakrishnan, Neelesh Bam and Aiman Ashraf, most of them IIT and IIM graduates. The company’s app enables people to make payments using their mobile phones while dining out, shopping or commuting. The startup has tied up with more than 3,000 brick-and-mortar merchants in Bengaluru and Pune, including restaurants and pubs like Toit, Prost, Big Brewsky and Haagen Dazs. Unlike Paytm and Mobikwik, which facilitate cashless payments with a virtual wallet that stores a fixed amount of money, Momoe’s app works by linking credit cards and debit cards and through net banking. ET reported on February 22 that Shopclues, which is positioning itself as a market rather than a shopping mall, was scouting for payments, analytics and ad-tech companies to buy to strengthen its seller network as a way to trump over rivals such as Paytm and Snapdeal.
Source: Economic TimesShopclues wants Momoe, eyes a bite of payment business
Industry: Information technology 2016-03-14
