With an eye to deepen its reach in offline retail, Amazon India has acquired Perpule, a Bengaluru-based retail tech startup that offers point-of-sale (POS) devices to brick-and-mortar shops allowing them to accept digital payments.
Regulatory filings with the Reserve Bank of India, the country’s central bank, show that Amazon spent USD 14.7 million to buy the four-year-old startup in a cash deal. A report by local media Mint that cited two sources, said Amazon will pay an additional USD 5 million to Perpule as compensation towards its employees.
“Perpule has built an innovative cloud-based POS offering that enables offline stores in India to better manage their inventory, checkout process, and overall customer experience. We are excited to have the Perpule team join us to focus on providing growth opportunities for businesses of all sizes in India while raising the bar of the shopping experience for Indian customers,” an Amazon spokesperson told KrASIA in an email response.
Perpule was founded in 2016 as a B2C company that aimed to eliminate the queues at the billing counter of physical retail stores. It allowed shoppers in malls and other large retail stores to pay for their purchases directly from its app without having to wait at the checkout counter. However, after three years the founders realized it was difficult to scale the model as they were dependent on the retailers to digitize their catalog.
Abhinav Pathak, co-founder of Perpule told KrASIA in an earlier interview that while digitizing payments at retail stores, the team learned that these stores didn’t have any mechanism to integrate price changes, discounts, and offers on their merchandise.
In 2019, it pivoted to a B2B model and launched a mobile POS machine that allowed physical retailers to accept digital payments. In addition, the POS terminal could also provide real-time analytics, and manage orders and inventory of their e-commerce as well as in-store sales.
According to the Mint report cited above, the acquisition gives 4x to 5x returns to its investors which include Prime Venture Partners, Kalaari Capital, Venture Highway, and Taxiforsure co-founder Raghunandan G.
The acquisition is in line with Amazon’s efforts to bolster its position in offline retail which still dominates retail sales in India. In June last year, Amazon had launched ‘Smart Stores’, to bring offline stores under the digital realm. Under this program, Amazon provides physical stores with a piece of software and a unique QR code, which once scanned via the Amazon app show users all the products that the store has in stock.
Digitizing offline stores in India has emerged as one of the biggest opportunities in the country as it allows technology startups to access the customer base of these retailers. A few large POS startups in India that compete with Perpule include PineLabs, MSwipe, and Paytm. Additionally, startups such as Khatabook and OkCredit have taken a different approach to digitizing the country’s offline stores by offering to turn their physical ledger books into a digital format.