Amazon Pay, the digital payment solution arm of Amazon Inc, is set to acquire an Indian startup, Tapzo. The deal is reported to be valued at $40 to $50 million and it could be a cash cum stock deal. The 2 co-founders of Tapzo, Ankur Singla and Vishal Pal Chaudhary may receive some stocks of Amazon Inc in addition to partial settlement in cash. It is also expected that they may stay on with the operations of Amazon Pay even as Tapzo is being integrated into it.
Tapzo, though started initially with the name Akosha is a kind of aggregator with multiple services including hosting links to sites like Amazon, Flipkart, Uber and Ola and a host of other apps via its interface. Besides this, it also facilitates recharges on DTH, data cards, bill payments, booking flight tickets or order a cab etc. The startup then tied up with a couple of platforms like Bank Bazaar and India Lends to offer finance products also on its platform. However, the overall performance in terms of growth in transactions through its site has far from expectations. That might be one major reason for the founders to have opted out and sold to Amazon.
The founders have been changing the business model a few times and in terms of funding, Sequoia Capital, RB Investments of Singapore and RU-Net are the investors in Tapzo. Fund infusions have been carried out internally through these investors and the last known valuation of the startup was around Rs 600 crore.
Amazon Pay has its hands full competing with rivals Phone Pe of Flipkart (now owned by Walmart) and Paytm, backed by Alibaba and SoftBank of Japan and this acquisition will help consolidate and expand its presence and attract more customers.
Interestingly, it also comes just as Amazon launched a new bill payments service on its Amazon Pay platform and has tied up with several mobile, broadband and electricity billers.