Tata Group is considering investing an additional USD 2 billion in its super app project as the salt-to-software giant looks to strengthen its digital operations, sosurce close to the develoopments said.
If a deal to proceed, Tata Digital Pvt. would receive the additional funding over a two-year period. One of the sources claimed that the additional funding might aid online platform Tata Neu, which launched last April, in expanding its digital products, resolving technological issues, and covering any unexpected expenses.
As per information, Tata Group had urged Tata Digital to seek for ways to increase the valuation of the super app. The conglomerate may yet alter the size and timing of a deal, the sources, who said discussions are still in progress.
Any further funding would come at a time when Tata Digital is reevaluating its strategy and battling established e-commerce competitors like Amazon.com Inc. and Walmart Inc.'s Flipkart. Modeled after China's ubiquitous Alipay and WeChat, Tata Neu was India's first super app since at least mid-2020 but rapidly encountered technical issues and user concerns. Reliance Industries Ltd. and Adani Group, two local powerhouses, plan to launch their own super apps as well.
Users of Tata Neu can purchase goods from brands owned by Tata, including food, electronics, and reservations for restaurants and flights. The app offers financial services like bill payment, loans, and insurance, as well as membership services.
In its first year, Tata Neu is expected to achieve only half of the sales goal. In comparison to the USD 8 billion aim established at the start of 2022, the mega app will witness revenues of approximately USD 4 billion in the year to March 31, as per a January report from Bloomberg.
Tata Group invested more than USD 2 billion in the last three years to buy businesses like e-pharmacy 1mg and e-grocer Bigbasket to strengthen its e-commerce portfolio. The controlling company for the firm, Tata Sons Pvt., looked into enlisting financial or strategic backers, such as major international technology businesses, to support the super app, it said.
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