India has emerged as one of the biggest internet markets in the last few years, which means that it gets special attention from tech companies like Google and Facebook. The same is true for Amazon, which has been trying to expand its footprint in a country where offline shopping is still the norm. To this end, the e-commerce giant has been tapping into India’s vast network of mom and pop (kirana) stores, and today’s news is just a continuation of that effort.
In its latest attempt to deepen its footprint among small and offline retailers in the Indian market, Amazon has acquired Bengaluru-based retail tech start-up Perpule in an all-cash deal worth ₹107.6 crores ($14.7 million), according to regulatory filings by Perpule.
If you are a Perpule employee, you would not be left stranded. The US tech giant is expected to spend an additional $5 million or so to compensate Perpule’s employees, which could help continue to bolster the deal up to around ₹1.5 billion (about $20.4 million.)
Not only will the acquisition help boost Amazon’s viability in the kirana-tech space, but it is also set to aid the e-commerce giant in utilizing Perpule’s cloud-based point-of-sale (POS) offering- UltraPOS, in order to offer a new suite of tech products for kirana partners. It will also look at updating the digital technology for partners. UltraPOS is a service aimed at helping small businesses via a store management solution. It helps them accept digital payments and also establish their presence on various mini-app stores including those run by Paytm, PhonePe, and Google Pay in India.
Perpule’s investors – which include Prime Venture Partners, Kalaari Capital, and Raghunandan G – are likely to exit with 4-5 times returns, it was reported. The co-founders of the four-year-old start-up, Abhinav Pathak, Saketh BSV, and Yogesh Ghaturle, are likely to join Amazon.
An Amazon India spokesperson confirmed the news of the acquisition, saying that Perpule’s cloud POS would help offline stores manage their operations better. “Perpule has built an innovative cloud-based POS offering that enables offline stores in India to better manage their inventory, checkout process, and overall customer experience. We are excited to have the Perpule team join us to focus on providing growth opportunities for businesses of all sizes in India while raising the bar of the shopping experience for Indian customers,” the spokesperson said.
Amazon, in June 2020, had launched a ‘Smart Stores’ feature to help offline stores digitize their inventories, increase footfalls and drive sales for retailers. Users can scan the store’s QR code and explore products inside the store. It has gained much popularity as retailers have extensively used the feature to enable instantaneous transactions on the digital forefront. The acquisition of Perpule would power and drive the adoption of Smart Stores with its PoS solution.
Since its $4.7 million Series A round in November 2018, Perpule has raised around $6.36 million. Perpule has come a long way from the launch of its initial product, which helped customers avoid queues at super chains such as Shoppers Stop, Spar Hypermarket, and Big Bazaar. The company has also entered the South East Asian market (including Indonesia, Malaysia, Thailand, Singapore, and Vietnam) to help offline retailers to shift to an online platform and mobile application. It also launched StoreSe last year to connect retailers and apartments across 2,000 apartments in Bengaluru and nine other cities.
It is the interest of behemoths like Amazon and Flipkart that has worried Indian retailers, who have argued that the giants have been breaking India’s rules over foreign investments and have proved hazardous to small- to medium-sized businesses (SMBs.) Amazon’s ‘Smart Stores’ feature was launched to deepen its presence in the Indian market, and the US giant has relied on its strong presence in the country to expand its delivery network and warehouses.