2017 witnessed a number of startup acquisitions. Some were totally unexpected while some were on the radar. However, a few acquisitions not only came to news but also took the entire ecosystem by surprise. The deal that gained maximum limelight is the one which never happened after months of speculations. It was the Flipkart-Snapdeal merger which extended for six months and nothing came out of it. One of the most talked about acquisition in the year was Flipkart’s acquisition of eBay India which took place in April 2017. With this acquisition, Flipkart has been able to add another weapon to its arsenal and the global ecommerce company eBay also managed to exchange its loss making Indian entity with a 5.4% stake in Flipkart.
Another major sensation of the year was the acquisition of Indian startup Halli Labs by Google. This is the first startup acquisition made by Google in India. It has allowed Google to utilize Halli Labs’ advanced machine learning and artificial intelligence technologies in order to upgrade the older domains and improve performance.
It can be said that the overall sentiments around the startup ecosystem were positive. This could also be due to the 1000+ shutdowns that investors are making moves very cautiously. Against a total startup acquisition of 155 in 2016, the Indian startup ecosystem observed about 123 startup acquisitions until November.
Biggest startup acquisitions in 2017
Freecharge: Freecharge provides online recharge and bill payment services and competes against players like Mobikwik and Paytm. Launched in 2010, Freecharge was acquired by Snapdeal for $400 million at $5 billion valuation in 2015. After the losses suffered by Snapdeal, Freecharge was sold to Axis Bank for $60 million although it was valued at $400 million, in July 2017.
ItzCash: Itzcash is one of the early players in the Indian digital payment space. It was acquired for $123 million against an 80% stake by US headquartered Ebix Inc. It was the largest non-Bank prepaid payment instrument in the country which crossed the $2 billion mark on a card base of 110 million. Post-acquisition it has been rebranded to EbixCash.
Zarget: Zarget is a Saas-based web optimization and marketing platform which had a dream year in 2016 with more than $7.5 million funding from the investors. This was brought to a halt with the sale of the Zarget to FreshWorks for a deal valuing around $15-$18 million in a mix of equity and cash payout. This is the ninth acquisition by Freshworks in the last two years.
Runnr: The Bengaluru based startup Runnr, started as a B2B platform and changed its business model to ecommerce delivery. It acquired TinyOwl to compete with players like Swiggy and Zomato. The startup was acquired by Zomato in September 2017.
Little Internet: Little Internet was an app only market place run by Zovi founders. Paytm was said to have invested about $8 million in it. Later, Paytm bought the stake from the investors for $30 million for Little Internet after it failed to achieve growth.
Nearbuy: Nearbuy, which was earlier known as Groupon India came into existence in 2011 and was rebranded as Nearbuy in 2015. Nearbuy and Little Internet now stand together with Paytm having 50-55% stake in the merged entity. Paytm is said to have infused$5 million cash in the merged entity.
MobiSwipe: MobiSwipe is a payments enabler for merchants to facilitate the payments through debit cards and credit cards on its mobile application. UAE based payments solution provider, OMA Emirates acquired MobiSwipe in February 2017.
India Webportal: The digital media distribution company was launched in 2010. It is a JV of Penske Media Corporation and Zee Entertainment Enterprises Ltd. The parent firm Zee Entertainment held 51% share in the JV and later bought the remaining 49% stake from the existing investors for $30.7 millon.
Sokrati: The digital media startup, Sokrati was engaged in data analytics and performance marketing. It offers integrated digital services and CMR based marketing. Sokrati enjoyed two years of bookstrapping, four years of Series A and two years of Series B funding and then was acquired by Dentsu in July 2017 for a deal estimated to be between $108 million-$124.4 million.
Startups have started understanding the importance of clubbing their synergies in order to make a strong hold on the existing market instead of competing with one another. There were lesser number of acquisitions in 2017 as compared to 2016, but it must also be noted that the number of Indian startups launched in the year was also less. This suggests that the market is moving on the right path.
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