Indian financial technology start-ups (online wallet startups) saw twelve acquisitions in 2016, according to a report published by the start-up tracker, Tracxn. Six of these were in mobile wallet and online payments segment. That includes PayU Payments Private Ltd.’s acquisition of Citrus Payment Solutions Pvt. Ltd in a $130 million deal in September. It the largest deal in this sector in terms of value. Some of the other buyouts include Amazon India’s acquisition of online payment gateway services Emvantage Payments Pvt. Ltd, Flipkart Ltd.’s acquisition of Unified Payment Interface – based payment app PhonePe, Ola’s acquisition of interbank mobile payment platform Qarth and Shopclues’ acquisition of mobile wallet for offline stores Momoe Technologies Pvt. Ltd. Read more on acqisitions
“Companies from the e-commerce and consumer Internet sector are buying out these online wallet and payment companies to ramp up their payment infrastructure, in what is seen as an effort to evolve into a complete ecosystem as part of their service offerings”, Tracxn said. Flipkart, India’s largest e-commerce firm has also ventured into fintech through its recent tie – up with Bajaj Finserv Ltd to offer e-commerce purchase loans, said Tracxn. It estimates that the Indian retail loan segment would grow at a compound annual growth rate of 18% to reach $830 billion by 2020! Among the remaining acquisition deals, they were mostly acqui-hirings in the online lending space to improve product offerings and operations. Acqui-hire is when a company acquires another for its employees’ skills.
According to Tracxn, the overall funding in fintech had reduced to $512 million across 83 deals in 2016, when compared to a peak of $1.4 billion last year across 80 deals. This is due to Paytm Mobile Solutions Pvt. Ltd.’s series E round of funding, which accounted for almost 49% of $1.4 billion. While the total funding at the seed stage has year-on-year increased by 12.5% to $27 million, the slowdown in total funding can be attributed to a decline in the early and late-stage funding activity. The report said that the average investment ticket size at the series B round of funding saw a 24% increase to $15.4 million.
The online wallet payment sector has become increasingly popular and important over the past few years. Any company, be it a startup or an established company, is looking to ramp up its payment infrastructure and integrate that feature into its existing services to provide better facilities to existing customers and to attract new ones. It is a quite useful trend and eliminates the need for customers to carry hard cash in their wallets or purses to make payments for products all the time. Online wallets today, provide good online security to customers and in a way protect them against physical theft of their wallets or money. The future for online wallet startups looks bright. Read more on Startups
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