Discovery and deals platforms Nearbuy and Little Internet have merged, and financial services platform Paytm has taken a major stake in this combined entity, it was announced on Wednesday.
The merged entity is expected to be valued at about $100 million with a fresh capital infusion of $25 million by Paytm, according to The Economic Times citing sources.
Paytm is the largest shareholder in Little. Nearbuy was earlier Groupon India. The merger of the two forms the largest player in the space. The payments major will hold around 50 per cent in the merged company.
Paytm said Wednesday in a statement that existing shareholders of Nearbuy including Sequoia India will come on board the Little-Nearbuy combine but it did not give any financial details on the transaction.
While the Nearbuy founders Ankur Warikoo, Ravi Shankar and Snehesh Mitra are expected to stay on, Little co-founders Manish Chopra and Satish Mani are expected to move out after the merger, according to The Times of India.
Paytm's interest in acquiring the two deal sites was reported in media including Domain-b last month (See: Paytm to buy start-ups Nearbuy, Little for $30 mn: report).
''In the local commerce space, Little Internet and Nearbuy combined will own 88 per cent of the market share,'' said Warikoo, Nearbuy's chief executive, without commenting on specifics of the transaction. ''There are around half-a-million merchants in the organised retail space, which we would like to bring on our platform.''
Paytm aims to strengthen its offerings for offline merchants by enabling them to acquire new customers through deals. Nearbuy and Little work with over 40,000 small and large merchants across the food, beauty, travel and other categories.
Vijay Shekhar Sharma, founder and chief executive of Paytm said, "This combination of Nearbuy and Little marks a great opportunity for us to reinforce our commitment to support small and large retailers in the new age of mobile commerce and payments."
Little Internet, which runs the Little app, had in 2015 racked up $50 million and later got the Singapore government's sovereign wealth fund GIC on board. Paytm bought out GIC and Tiger Global from the company.
Gurgaon-based Nearbuy, which broke off from its parent Groupon India, in 2015 had scooped up a $20-million cheque from Sequoia Capital at the time. Both the companies offer deals across restaurants, movies, hotels, salons, gyms, and spas. Paytm, which has been betting on its online-to-offline (O2O) model, wants to bulk up this vertical with these platforms coming into its fold.