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Paytm Set To Acquire Nearbuy, Little At A Reduced Valuation Of $30 Mn; Both Had $80 Million Funding!

This is a typical case of a bigger startup engulfing two smaller, distressed startups at a killer price tag.

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Paytm Acquires Nearby & Little

This is a typical case of a bigger startup engulfing two smaller, distressed startups at a killer price tag.

Nearbuy and Little, two different local deals apps with combined funding of $80 million have been bought by Paytm for just $30 million. And this acquisition has been done to boost Paytm’s next big gamble: Online to offline business model.

Will it work?

Nearbuy & Little: Two Distressed Startups Now Sold

Nearbuy, which was formerly Groupon India, had backing of Sequoia India, which had invested $20 million into the startup.

Groupon India launched their operations in 2011, by acquiring SoSasta.com, which was the 4th largest daily deals and coupons website at that time. At that time, they had branded themselves as Crazeal, which was later changed to Nearbuy.

Their main forte was providing daily deals and coupons in Food & Beverage, Beauty & Wellness, Movies & Events, Things to do and Hotels.

In 2015, Groupon became minority stakeholder by selling their stake to Sequoia India.

On the other hand, Little was backed by Little Internet Inc, and GIC and Tiger Global were major stakeholders in this startup. Later, they received $50 million funding, and Paytm became the main shareholder by replacing Tiger Global.

Just like Nearbuy, Little also offers daily deals and coupons, primarily focussed in Bengaluru and Hyderabad.

Together, both Nearbuy and Little had received $80 million of funding from various sources till date.

Hence, acquisition of these two startups for $30 million by Paytm can be described as an interesting, profit oriented deal.

As per insiders, both Nearbuy and Little were in desperate need of fundings, and Paytm’s entry came at the right time.

Paytm’s O2O Model Push

Meanwhile, analysts are predicting that these two acquisitions by Paytm is a further proof that they are doing deep into the lucrative Online to Offline or O2O business model, backed by their mobile wallet.

Way back in 2015, when Paytm first introduced QR code based payment mechanism for offline merchants, we had predicted that this model would be the future of wallet industry.

Gradually, as Paytm introduced concepts such as same day delivery, Internet-less connectivity and then unsecured loads to local kirana stores and auto-drivers, we were sure that Paytm wants more penetration and more market share in the offline business, powered by their mobile wallet, and helped by the Govt.’s Digital India mission.

This year, Paytm’s biggest O2O push came when they announced digitized QR codes for all kirana stores, so that their products are categorized digitally, and consumers can order them via their app.

Now, the acquisition of Nearbuy and Little, whose speciality lies in connecting offline businesses with online customers, Paytm has made clear what their intentions are: Complete domination of offline services industry, and more market share in the O2O niche.

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