Sunday, April 25, 2021

Why did Amazon Acquire Perpule ?

What happened?

  • Amazon has acquired a startup in India that is helping offline stores go online. Perpule is a four-year-old startup. 
  • Amazon acquired retail tech startup Perpule in an all cash-deal of ₹107.6 crore to bolster its play in the kirana-tech space, according to regulatory filings.
  • Amazon is expected to pay additional remuneration to Bengaluru-based Perpule’s employees, which may bump up the overall deal value to about ₹150 crore

Context:

  1. In India, brick and mortar continue to drive more than 95% of sales.

  2. In January 2020, Amazon’s founder and former CEO Jeff Bezos had announced that the ecommerce giant will invest $1 Bn in India to support small and medium-sized businesses (SMBs). He noted that the company would also help the retailers to export goods valuing over $10 Bn worldwide by 2025.

  3. Almost a year back, Amazon launched ‘Smart Stores’ to help offline retailers digitise their inventory and launch a digital storefronts on its app. The ecommerce giant has also scaled its ‘Local Shops’ programme to 50K offline sellers in March and plans to further grow to 1 Lakh by the end of 2021


How did Perpule evolve?:

  • Founded in late 2016, the Indian startup’s first product was focused on helping customers avoid queues at superchains such as Shoppers Stop, Spar Hypermarket and Big Bazaar. But the product, said Abhinav Pathak in a recent interview, wasn’t scaling, which is when Perpule pivoted.

What does Perpule actually do? What is its products?

  • Perpule is a customisable enterprise ecommerce platform that allows small retailers to venture into the digital space.
  • Perpule offers a mobile payments device (point of sale machine) to offline retailers to help them accept digital payments and also establish presence on various mini app stores including those run by Paytm, PhonePe and Google Pay in India.
  • UltraPoS, which is Perpule’s primary product is a full-fledged store management solution that helps small businesses digitally manage and automate inventory, purchase orders from distributors, and billings.

What does Amazon gain out of this acquisition? Why did they do it?

  1. The acquisition will allow Amazon to leverage Perpule’s cloud-based point-of-sale (PoS) offering, UltraPoS, for upscaling their game in India's kirana stores market.

  2. It would also enable Amazon to offer a new suite of technology products to its kirana partners, while digitising neighbourhood stores.

  3. Besides this, Perpule would also enable its network of 10K store and retail partners to understand customer demographics and purchase patterns. The company has marked its presence across India, South-east Asia and the UAE as of 2020. Close to 60% of the product’s customer base are international clients including Matahari Retail in Indonesia and Landmark Group in Malaysia.

  1. The acquisition of Perpule comes a year after Amazon launched ‘Smart Stores’ to help offline retailers digitise their inventory and launch a digital storefronts on its app. The ecommerce giant has also scaled its ‘Local Shops’ programme to 50K offline sellers in March and plans to further grow to 1 Lakh by the end of 2021. This acquisition will help elevate 'Smart Stores' and 'Local Shops' program goals.

What will investors gain?

  • The acquisition is expected to provide Perpule’s investors an exit with 4x-5x returns. The four-year old startup has raised close to $4.7 million till date from Prime Venture Partners, Kalaari Capital, Venture Highway and Taxiforsure co-founder Raghunandan G.

References and above text from:


Posted by at

No comments:

Post a Comment

Subscribe to: Post Comments (Atom)