Radhika Aggarwal and Sanjay Sethi, founders of ShopClues. Photo: Mint
Online shopping platform ShopClues.com is in advanced talks to buy mobile payments firm Momoe Technologies, as it looks to add a payment service to its platform, according to three people aware of the discussions.
The all-stock deal, likely to be announced in the next 45 days, could value Bengaluru-based Momoe at anywhere between $8 million and $15 million.
Mint reported in December that ShopClues was looking to invest close to $50 million in either buying stakes or acquiring start-ups in the hyperlocal, ad-tech and Internet payments domains in order to accelerate expansion in India’s fast-growing e-commerce market.
ShopClues will use Momoe’s technology to strengthen its payment network for merchants on its platform and will further integrate it with its hyperlocal commerce business, one of the three people cited earlier said on condition of anonymity.
During the past 12-18 months, large e-commerce firms have made investments, acquisitions and partnerships with payments companies to claim a share of the digital payments vertical, which helps reduce the dependency on cash and makes it convenient for online shopping.
In February, Amazon announced the acquisition of online payments firm Emvantage Payments Pvt. Ltd to develop India-specific payments solutions; Snapdeal acquired mobile wallet firm FreeCharge in April 2015; and Flipkart bought payments services company FX Mart Pvt. Ltd in August 2015.
Momoe was founded in June 2014 by Utkarsh Biradar, Karthik Vaidyanathan, Ganesh Balakrishnan, Neelesh Bam and Aiman Ashraf. The company primarily provides payment solutions for offline merchants. IT allows customers to make digital payments using the Momoe app on their mobile phones.
In February 2015, Momoe raised close to $1.2 million from IDG Ventures India, Jungle Ventures and India Quotient. The firm currently has 4,000 merchants on its platform in Bengaluru and Pune.
Momoe, which has around 40 members on its team, will be absorbed by ShopClues, people familiar with the matter said.
ShopClues and Momoe declined to comment.
US-based ShopClues, which in September launched a chat feature ShopClues Connect for consumers to directly interact with sellers, is likely to use Momoe’s technology to further strengthen this platform and ease transactions. It will also help ShopClues’s hyperlocal commerce platform, which has been launched in Gurgaon and is currently in the beta stage.
ShopClues, which in January raised close to $100 million—largely from sovereign wealth fund GIC Pte Ltd of Singapore—currently has a seller base of over 250,000 merchants. Other investors backing the company include Tiger Global Management Llc, Nexus Venture Partners and Helion Ventures.
The online marketplace, run by Gurgaon-based Clues Network Pvt. Ltd, is focused on taking unstructured categories online, unlike large e-commerce firms Flipkart, Snapdeal and Amazon, which largely focus on structured categories. ShopClues counts the Indian middle-class looking to buy unbranded goods as its target clientele. Founded in 2011 by Sandeep Aggarwal, Radhika Aggarwal and Sanjay Sethi, it currently ships over 4 million items and gets over 150 million visitors a month.
India’s e-commerce market is estimated to touch $100 billion by April 2020, Goldman Sachs said in an October 2015 report.