According to various reports, it is understood that Amazon has paid nearly $40 million for acquiring the Tapzo. Tapzo is a startup which aggregates various application based services like Ola, Uber, food delivery services like Zomato, Swiggy, Bill Payment services Bill Desk and many more in one single application. Amazon is reportedly paying in betwixt $ 30 million and $ 40 million and its intention is to influence Tapzo’s one stop solution services application for helping it to grow the Amazon Pay usage in the country.
Amazon pay has been seeing a wider global push to incitement adoption of the service. But in India, the drive for asking people to use Amazon Pay might be strong. The Wallet services like Google Pay, Mobikwik, Paytm, Phonepe and the others have dived in the market where the payment card usage is not that extensive and the consumers are conducting an increasing number of transactions on their mobile devices. If you are able to get the tracton for your mobile wallet, it puts you in a strong position for dominating in all kinds of transactions and commerce in Asia’s second largest economy.
The talks between Amazon and Tapzo have been in the works for a while but now that the deal has completed, the two seem to be downplaying the details. The messages sent to the Tapzo founder and the CEO, Mr. Ankur Singla went un responded. Another executive of Tapzo on phone said he could not comment but also didn’t deny the report. And in a statement provided to the TechCrunch, Amazon also did not explicitly confirm the deal, nor did Amazon deny it.
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“Our commitment to the vision of a less-cash India remains the same,” a spokesperson said. “Our goal is to make it easier than ever before for customers to make digital payments by improving the customer experience, affordability and daily routines.”
An email to one of Tapzo’s investors, Sequoia, also did not get a response. Tapzo had in all raised about $23 million, with other investors including Ru-Net, American Express and RB Investments.
The deal pairs together a startup that has had held a lot of promise but has also has been through several rebrands and pivots in search of a viable business model; with an e-commerce leviathan that has already invested billions of dollars money into India but is looking for a way of expanding its reach in beyond its own marketplace.
Tapzo has attempted to address a particular niche in the Indian market: Smartphone usage has taken off in India, with many using mobile handsets as their primary “computer” for getting online. That creates an opportunity for companies looking to connect with customers, but also a challenge: there is a lot of app churn, and an added pressure on publishers to provide lasting value to consumers whose devices might be space-constrained and wallets cash-constrained to use and pay for anything but the most top-priority data services.
“One of the worst-kept secrets of the mobile app industry is that almost all apps (except for the top 5-8 apps) see 60-80 percent uninstall rate within 90 days of users installing the app,” Singla wrote in a blog post when explaining the challenge in the market. “India probably has the highest uninstall rate in the world, so when an app says it has 20 million installs, you can do your math.”
The main idea is that, by loading the Tapzo application with various services, it makes the whole application more valuable to various users and thus having all the services in one application also means that the users of Tapzo don’t need to provide much space for multiple applications those could be more like to get uninstalled on their own.
Tapzo also claims having more than 5 million users across 100 cities in India turning to tapzo for connecting with over 40 different services. it also says, till date it is enabled over 25 million transactions. Tapzo haven’t gained this success overnight.
The company has been through various pivots and the rebrands since 2010, starting first as Akosha a platform for various businesses to communicate with the customers then becoming the Helpchat which is a chatbot and a personal assistant and also a recent pivot to Tapzo. Tapzo in its latest incarnation potentially plays directly into Amazon’s strategy to build out its presence in India by way of Amazon Pay, Amazon’s payment processing service that competes against the likes of Google Pay, PayPal and the rest.
Tapzo and Amazon Pay had already been working together on promotional efforts: to encourage more people to integrate and use Amazon Pay for transactions on Tapzo, the two have run multiple promotions where users could get money back and discounts on a wide range of services you can access through Tapzo.
A closer relationship by way of acquisition could not only see Amazon Pay becoming a default payment option, but it could give Amazon the chance to use the app to promote its own network of services and merchants, whether it’s for restaurant delivery or for a deal on a new mixing bowl to cook it yourself — a twist on the company’s classic marketplace model.
Amazon could also use it as a loyalty and points service: book your next Ola car through Tapzo, pay for it with Amazon Pay, and get money towards your next purchase on Amazon.in. That could be one way of fulfilling Amazon’s goal “to make digital payments by improving the customer experience, affordability and daily routines,” with Amazon getting a cut on those payments.
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