Tata Group may put in $1 billion into its super app venture in a bid to boost its digital business.
This is on top of the $2 billion that it had invested earlier this year.
Who is the recipient?
Tata Digital Pvt. will receive the new funding in the coming year if the deal proceeds.
Tata Neu, India’s first super app launched in April 2022 was designed after China’s Alipay and WeChat.
However, it suffered from technical glitches and customer complaints soon after its launch last year.
Investment purpose
It will go towards improving the app’s operational efficiency and user-friendliness, ensuring a more seamless digital experience.
The conglomerate has asked the digital unit, which runs its online platform Tata Neu, to streamline its operations and fix glitches in the app to make it more user-friendly.
Adopting Reliance’s strategy
It has also urged the super-app venture to explore tapping global sovereign and financial investors for future funding needs.
This would be similar to the strategy Reliance Retail Ventures has adopted, namely consistent fundraise from external sources.
Qatar Investment Authority and KKR & Co. in recent months invested in Reliance Retail at a $100 billion valuation.
Deliberations are ongoing and details of Tata Group’s capital injection could still change.
App offerings
The app allows users to buy groceries and gadgets as well as reserve plane tickets and restaurants from brands under Tata’s umbrella.
It also offers a membership service and offers financial products such as bill payments, loans and insurance.
Tata Group acquired firms including e-grocer Bigbasket and e-pharmacy 1mg to add to its e-commerce portfolio, investing more than $2 billion in the past three years.
To meet just half of sales target
It was reported earlier that Tata Neu is expected to meet just half of the sales target in its debut year.
It will see sales of about $4 billion in the year to March 31, compared with the $8 billion target set at the beginning of 2022.
