To build out its payment arm, ShopClues acquires Bengaluru-based startup Momoe
It was reported on Friday that online marketplace ShopClues had acquired Bengaluru based mobile payments company Momoe, for building out the payments arm to its business.
According to The Economic Times the deal size is estimated to be at $10-12 million, paid both in cash and stock. This merger will help the e-commerce firm establish their offices in the startup capital, Bengaluru with all Momoe founders expected to join ShopClues’ senior management. The deal will also help ShopClues kickstart a semi-closed wallet and solutions for merchants.
Confirming the development was the CEO of ShopClues Sanjay Sethi, who said
We got five very senior people in the company as a part of this acquisition, which is the most exciting part. Momoe comes with a working merchant base, PCI compliance which would have taken us 8-12 months to obtain and banking relationships. Building a payments business requires a different DNA.
However, Sanjay refused to comment on the deal size.
Founded in 2014, till now Momoe has raised a seed round of $1.2 million in funding led by IDG Ventures India, Jungle Ventures and India Quotient in March this year. The investors are expected to get cash and stock in ShopClues as a part of the transaction.
In an interaction with YourStory in September last year, Momoe claimed to have over 1,050 merchants across different sectors, apart from its initial foray into restaurants. After getting the reach and visibility from fine dining restaurants and breweries, Momoe expanded to grocery stores, spas and salons, apparel stores and hyperlocal apps. It also claimed to process close to 1,000 transactions a day then, with an average ticket size close to Rs 900.
On the B2C side, Momoe claimed to have close to 1,50,000 users, based out of Bengaluru in September, last year. According to the founders, 50 per cent of the transactions that happened on the app were from repeat customers.
With the acquisition, co-founder Utkarsh Biradar is expected to join as Vice-President heading design and product on the merchant side; Ganesh Balakrishnan is expected to lead platform monetisation and services; Neelesh Bam will be heading merchant acquisition while helping ShopClues expand their base in South India; Aiman Ashraf is most likely to head technology for payments and Karthik Vaidyanathan will be working on strategic initiatives with ShopClues co-founder Radhika Aggarwal.
This January, ShopClues was reported to raise a fresh round of funding led by sovereign wealth fund GIC Pte Ltd, with participation from existing investors Tiger Global Management LLC and Nexus Venture Partners, at a valuation of more than $1.1 billion.
The firm in January was reported to be shipping over 3.5 million items and getting over 100 million visitors a month.
The e-commerce unicorn is expected to set aside 200-275 crores to spend on acquisitions in the payments, analytics and the ad-tech space.
Buying out a payment business is almost key to e-commerce strategy. In April last year, Flipkart acquired PhonePe (for not more than $45 million) and Snapdeal acquired mobile recharge and payments company Freecharge, with Paytm already having its payment services in-house.