Tata Group plans to invest additional funds in its super-app, Tata Neu
20 Oct 2023
Tata Group, one of the largest Indian conglomerates, is planning to invest another $1 billion in its super app venture. This decision was made in an effort to improve their digital business. Tata Group had already invested $2 billion earlier this year.
This new investment is expected to be infused into Tata Digital Pvt. and would aim to grow Tata Neu’s operational efficiency and user interface. They would also want to focus on a seamless digital experience.
Tata Digital Pvt. Ltd. is expected to receive this new investment in 2024 if the deal is agreed. Tata Group has also encouraged its digital platform, Tata Neu, to fix its glitches and try to make the app more user-friendly.
Tata Group has also instructed the super-app venture to explore the idea of foreign investment for any future investment needs.
Reliance Retail Ventures, controlled by Mukesh Ambani, has also adopted a similar strategy to raise money from outside investors. Qatar Investment Authority and KKR & CO. have recently invested in Reliance Retail Ventures at a valuation of $100 billion.
The details of the capital injection by Tata Group are still not ironed out and can still change.
Tata Neu was launched in April 2022 and was India’s first super-app, inspired by Chinese apps such as WeChat and Alipay. A super app refers to a mobile or web application that amalgamates various services within a single platform, often known as a multi-service tech platform. Through Tata Neu, users can buy a wide range of products, such as groceries and gadgets. They can also reserve plane tickets through the app. The app allows users to have exclusive access to services and products provided by brands controlled by Tata Group. Even financial transactions such as bill payments or applications for loans and insurance can be completed through the app.
Tata Group's strategic acquisitions, such as e-grocer Bigbasket and e-pharmacy 1mg, aim to provide consumers with access to a diverse range of services. Over the past three years, the conglomerate has cumulatively invested more than $2 billion in these endeavors.
Tata Neu is expected to meet only half of its sales target as compared to its debut year in 2022. Tata Neu is expected to earn $4 billion in revenues this year as compared to $8 billion in 2022.