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The team from the payments company will develop products and solutions aimed at the Indian market
E-commerce is big business in India, and Amazon has been cashing in for the last few years, turning itself into one of the major players in the space. In fact, the company has made it clear that it sees India as a key market for its own success going forward.
Of course, as with any huge market, there's plenty of competition, most notably from Snapdeal and Flipkart, two of the country's homegrown services. In order to stay ahead, Amazon has purchased Indian payments company Emvantage, it was revealed on Monday.
No financial terms of the deal were disclosed, but it was revealed that the Emvantage team will be coming to work at Amazon, developing payment products and solutions aimed at the Indian market. There is no indication that Amazon will be incorporating any of Emvantage's technology.
The acquisition will "help Amazon accelerate the development of convenient and trustworthy payment solutions for customers and the ecommerce industry in India," Emvantage wrote in a blog post.
The two companies expect to close the deal at some point during the first quarter of this year.
Amazon launched in India in 2013, and it has since become the second biggest investment country for the company, after the United States. Last year, Diego Piacentini, Amazon's head of international consumer business, told the Times of India that he believes that India will become Amazon's second biggest market within the next 10 years, and that operations in India operations had grown by 500 percent in the number of units shipped year-to-year.
The Indian e-commerce industry has been growing rapidly. It was worth about $3.8 billion in 2009, and by 2014 it was $17 billion. This year it's expected to jump another 67 percent, from $23 billion in 2015 to $38 billion.
The two other companies that have been benefiting from this rapid rise are Amazon's two main competitors. They have each been raising enormous amounts of money since 2014.
Snapdeal raised over $800 million in 2014 alone, including a $627 million round, followed by $500 million in 2015. Just this month it raised another $200 million, giving it a total of $1.74 billion in venture funding and putting Snapdeal’s valuation in the $6.5 to $7 billion range, a 35 percent jump from its previous valuation of $4.8 billion.
That made it the second most valuable startup in India, after only Flipkart, which is worth $15.2 billion, more than double what Snapdeal is valued at. The company raised nearly $2 billion in three rounds in 2014, followed by another $700 million last year. In all it has raised $3.15 billion.
Not that everything is perfect over at Flipkart. The company recently lost its CEO due to concerns over the company not yet being profitable. In turn that has led to some of its investors taking an early exit. In December, Accel Partners, the second biggest investor in Flipkart, reportedly sold it partial stake worth $100 million to Qatar Investment Authority.
Still, the combined firepower of Snapdeal and Flipkart is alot to go up against, even for a company of Amazon's size, so competing there will take a lot of resources. Amazon put $2 billion toward expanding its presence there in 2014, and nobody should be surprised if it invests even more money soon.
VatorNews reached out to both Amazon and Emvantage for more information about this acquisiton, and we will update this story if we learn more.
(Image source: emvantage.com)
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