With Rs 330 crore in pocket, Shopclues goes shopping
In the next couple of weeks, ShopClues will close its acquisition of Momoe, the wallet company. The Momoe deal is not only to get a play in the wallet business, but it will have a larger role in the unicorn’s future. It will help ShopClues’ merchants to do mobile banking, a service that is not yet available on the platform, while offering a wallet service like that of Snapdeal and Paytm.business Updated: Apr 07, 2016 19:18 IST
In the next couple of weeks, ShopClues will close its acquisition of Momoe, the wallet company.
“The Momoe deal is not only to get a play in the wallet business, but it will have a larger role in the unicorn’s future,” said a senior ShopClues executive. It will help ShopClues’ merchants with mobile banking, a service that is not yet available on the platform, while offering a wallet service like that of Snapdeal and Paytm.
Through Momoe, the merchant will have the capability to do accounting, do digital payments in offline mode and will also have offering in the merchant finance space. In a way Momoe will help ShopClues build what Rupee Power and Freecharge together are doing for Snapdeal – the scale, though is very small, but Momoe comes at just a fraction of what Snapdeal paid.
In an earlier meeting Sanjay Sethi, co-founder and CEO of ShopClues had told HT that the company will spend around $50 million, or around Rs 330 crore to acquire companies to plug-in gaps.
The executive also said that Momoe is just one of the many companies ShopClues is talking to. Another company is HeyBiz, a mobile app based services that helps search deals, products and support services, much like Snapdeal-backed UrbanClap. HeyBiz will help ShopClues build a marketplace for concierge services.
For the advertisement-technology platform ShopClues was in talks with Komli, but backed out, as Komli’s valuations were high. “We gave it a pass as it was overpriced,” said the executive. According to market sources Komli was valued at $10-12 million.
ShopClues founders Sethi and Radhika Agarwal continue to look for smaller companies in the ad-tech space for targeting product marketing to buyers. Flipkart and Snapdeal are ahead in this game.
The founders also looked at TargetingMantra, a startup that recommends products based on user behavior – something that is done very well by Amazon and video streaming company Netflix, but then backed out.
Shopclues is also in talks with a number of hyperlocal companies. Are these one of the big firms like BigBasket or Grofers? “No, it is a smaller Delhi-based company,” said the executive, without disclosing the name as the deal is in its early stage.
But, in one area Shopclues will build capabilities on its own – that’s data analytics. The founders were not able to narrow down a single company for acquisition. Data analytics has become crucial to ecommerce – it helps in better product discovery, and boosts conversion ratio. “We will make customised banner ads, and map social media footprint and see how customers are reacting to them, and will use those to improve conversion ratio,” said the executive. ShopClues has a conversion ratio of 4%.