Tech Mahindra to acquire Target Group

IT services and solutions firm Tech Mahindra has agreed to enter into an agreement to acquire Target Group, one of the leading processing platform companies in the UK. The value of acquisition is $164 Million and an adjustment for surplus cash up to GBP 8 Million.

The acquisition catapults Tech Mahindra to one of the top three processors in UK financial services for certain complex lending and investment product categories. It also strengthens Tech Mahindra European presence and adds several new clients. The acquisition will make Tech Mahindra a formidable player in the UK BFSI market with over 50 major financial institutions as clients.

The acquisition is in line with Tech Mahindra strategy of expanding its Fintech capabilities and adding IP and platforms to drive non linearity and play aggressively in the BFSI sector. Headquartered in the UK, Target Group has 740 employees and a client franchise, including leading financial institutions such as Goldman Sachs, Morgan Stanley. Target Group also has a strong pipeline which provides for high earnings visibility and cash flow generation.

Target Group provides BPaaS offerings in the areas of lending and investment products servicing to its clients, on variable pricing models. The combination of proprietary software, strong regulatory compliance practice and domain knowledge is a key differentiator for Target Group. The acquisition will help Tech Mahindra to expand its offerings in the lending, savings and investment and insurance sectors.

Facebook acquires Two Big Ears

Facebook is continuing to devote resources to fine tuning how 3D audio impacts viewer perceptions in virtual reality. The social media giant and Oculus parent company announced they have purchased immersive audio company Two Big Ears and will be making their technology free as a part of their new Facebook 360 Spatial Workshop.

The Edinburg based company, which has been around since 2013, specializes in spatial 3D audio in cinematic and gaming experiences. The company technology focuses largely on how sound plays in 3D spaces and how it interacts with surfaces that surround the viewer. Further progress in building hyper-realistic 3D audio is a major get for Facebook video and the Oculus platform.

Both the Gear VR and Rift support the immersive audio technology and the fact that Facebook is opening up Two Big Ears 3Dception technology for free to developers is a nice move to keep content creators happy. The company previously had two immersive audio products based on solutions for both cinematic VR and gaming. While the cinematic VR product has morphed into the free “Facebook 360 Spatial Workstation”, Two Big Ears will be working with the Oculus team on a way to integrate the gaming software.

Immersive 3D audio is hugely important to high-end virtual reality like that available on the Rift, but it is really even more crucial to the rather rudimentary VR experiences like those that are available on Facebook video right now. With the Two Big Ears purchase, Facebook has made it easier for Developers to make their experiences better and has strengthened the company pull in making the social media site the default hub for immersive VR video content.

Convergys in talks to buy Minacs

Convergys Corp, the US based call centre operator with operations in India, is in advanced talks to buy business process outsourcing (BPO) firm Minacs Ltd in a deal worth $500 Million. Convergys and a clutch of PE investors, including CVC Capital Partners Ltd and HIG Capital Partners had expressed interest in buying Minacs.

Minacs was acquired by the current owners from Aditya Birla Nuvo Ltd for $260 Million in 2014. In 2006, TransWorks Information Services Pvt. Ltd a unit of Aditya Birla Nuvo had acquired Canada firm Minacs Worldwide Inc. for about $125 Million. The $3 Billion Convergys provides customer management services in 58 Languages from more than 150 locations across the world. It employs 130,000 people across 31 countries.

Convergys claims to be number one in the US customer management industry with more than half of the top 50 Fortune 500 companies as clients. In India, Convergys is the 10^th largest with operations in Mumbai, Thane, Pune, Hyderabad, Gurgaon and Bengaluru. Minacs could be a right acquisition target for Convergys as it will help to strengthen its position in India, a fast growing outsourcing market.

Quikr buys beauty service provider Salosa

Online classified portal Quikr India Pvt. Ltd has acquired on-demand beauty service provider Salosa, owned by Beawel Tech Pvt. Ltd for an undisclosed amount in a move that will help the Tiger Global Management backed company penetrate deeper into the home services segment.

Salosa, founded in September 2015, currently operates in Gurgaon and parts of Delhi with a team of in-house beauticians. The beauty services market is close to $5 Billion in India and growing, which is evident from the increasing number of requests from Tier 1 and Tier 2 cities. On demand beauty service is an important sub-category and Salosa will help bring very real benefits to consumers.

Quikr had earlier committed an investment of INR 250 crore to strengthen its home services vertical. QuikrServices has 250,000 service providers who offer more than 80 services for consumers and has about 100,000 daily customers. Quikr is growing beyond a listing platform to a one-stop shop for used goods by enabling payments on its platform, as well as facilitating logistics.

Quikr is focusing on five key business segments such as automobiles, real estate, jobs, services and customer to customer sales. It has identified a new source of revenue and fends off competition from other revenue capital backed businesses that have emerged in each of these categories. As a classified portal, Quikr has just one rival OLX, which is backed by Naspers Ltd, a South African mass media company.

Knowlarity Communications acquires Smartwards

Cloud telephony start-up Knowlarity Communications Pvt. Ltd has acquired Smartwards Services Pvt. Ltd, a Gurgaon based startup that helps small businesses with loyalty programs.

This is the second acquisition of Knowlarity, which employs about 450 people and has so far raised about $22.5 Million from investors Sequoia Capital and Mayfield Fund since it started in 2009. It earlier bought Unicom Techlabs Pvt. Ltd, another startup in the same space in January 2014, and claims to serve about 15,000 customers in 65 countries.

Knowlarity competitors in the cloud telephony space Exotel Techcom Pvt. Ltd and Ozonetel Systems Pvt. Ltd have also made acquisitions in the last couple of years. Last year, Exotel acquired Voyce, a platform that helps businesses collect customer feedback, as part of its efforts to strengthen its customer service offerings, and voice based social media startup Croak it.

In 2014, Ozonetel acquired the speech recognition business of Yantra Software, a provider of speech and voice technology products and services. Startups that cater to small businesses in India have garnered some investor interest over the last year, with Snapbizz Cloudtech Pvt. Ltd which devises technology for grocery stores, raising $7.2 Million in an investment round led by venture capital firms Jungle Ventures, Taurus Value Creation, Konly Venture and Blume Ventures.

Google acquires start-up Synergyse

Google has acquired a business technology startup founded by an Indian origin entrepreneur as part of its plans to scale training offerings for Google Apps to its customers and customer’s users. It acquired Toronto based Synergyse which was launched in 2013 with an aim to teach users how to use Google Apps.

The Google apps product suite, which includes Gmail, Calendar, Drive and Docs, was built to provide cloud based productivity and communications and is now used by more than two million paying businesses around the world. Synergyse built a virtual coach inside of the Google Apps interface.

With voice and text interactive modules that are searchable by topic within its apps, Synergyse will help users get up to speed quickly including when new features are rolled out. Synergyse will help our customers with the critical task of change management in the enterprise, and bolster the training and support programs.

Snapdeal acquires TargetingMantra

Snapdeal.com, India’s second largest e-commerce company has acquired TargetingMantra (Insightful Pvt. Ltd) Gurugram based marketing and personalization Services Company for an undisclosed amount.

The Targeting Mantra team comes with valuable experience in driving superior customer experience through machine learning. The companies did not disclose the financial details of the transaction. The TargetingMantra team will help in building the customer experience solutions that will personalize shopping experiences for customers.

Founded in March 2013, TargetingMantra specializes in building products for enhancing customer buying experience, increasing conversion rates through intuitive product discovery, recommendations and channel selection. Snapdeal, founded in 2010 has become the biggest local rival to Flipkart. It raised $200 Million from the Ontario Teachers’ Pension Plan and others in February and with this round of investment the company’s valuation has risen to $6.5 Billion.

CarDekho buys Volob Technologies

Jaipur based Girnar Software Pvt. Ltd which owns and operates online portals CarDekho.com, Gaadi.com and Zigwheels.com has acquired Volob Technologies, a virtually reality startup in all cash deal. The deal size was undisclosed.

This is the third acquisition that the company has made this year. In April, it bought SaaS Startup Connecto and roadside assistance start-up Help on Wheels Pvt. Ltd in a cash and stock deal. Volob was founded in 2010 and provides 3D visualization solutions to various industries, primarily automotive, and this acquisition will strengthen 3D visualization capabilities of CarDekho by use of virtual and augmented reality.

CarDekho.com acquisition of Volob is aimed at amplifying the visual experience of car buyers in both real and virtual settings. GirnarSoft has enriched its value proposition for online buyers, dealers and OEMs. CarDekho, which is currently valued at $380 Million, raised funds from Google Capital and Hillhouse in March. The company that started out as a portal for used cars branched out to provide new car services after it acquired Gaadi.com in 2014.

Revenue generation for the company is greatly dependent on advertisement revenues from the new car segment. The strategy to move to the new car segment was adopted by rival CarTrade.com that acquired CarWale.com in 2015 and also raised Rs950 crore in a round led by Singapore based investment firm Temasek and March Capital this year. As part of its expansion plans in India, CarDekho is looking to add value added services. It launched insurance, accessories and tyres last year, in addition to roadside assistance services.

DriveU acquires CallAtHome

Humble Mobile Solutions Pvt. Ltd which operates on demand driver’s portal DriveU has acquired Gurgaon based driver booking platform CallAtHome (ANS Technologies Pvt. Ltd) for an undisclosed amount. DriveU will now have a presence in Gurgaon and over 500 driver partners with the acquisition a number it hopes to double by the end of this year.

DriveU started operations in Bengaluru in July 2015, and has a presence in Mumbai, Chennai and Delhi. The company, which raised $1 Million from Unitus Seed Fund and undisclosed angel investors in Silicon Valley in February, provides drivers to people so that they can use their personal vehicles, a model that’s in contrast with that taxi aggregators like Ola and Uber Technologies Inc. which are promoting the concept of people foregoing the use of their cars.

DriveU has completed 30,000 trips. DriveU charges consumers a flat fee of INR 99/hour. Drivers get 80% of the fee while the company retains the rest as commission. The average booking period is about four hours. The focus so far has been on Tier 1 Cities where car owners prefer to be chauffeured around than drive themselves. DriveU is also looking to expand this base to a network of 100,000 drivers in 20-30 cities in two three years. 

Comcast to buy DreamWorks Animation

Comcast Corp, the parent of Universal Pictures, agreed to buy DreamWorks Animation SKG Inc. in a deal valued at $3.8 Billion, building on the studio’s film and TV franchises by characters like Shrek as well as a US based production house.

Comcast will pay $41 a share in cash for the animation studio. Buying the maker of the Shrek and Kung Fu Panda films will bolster Comcast children lineup in theaters and add online assets like Awesomeness TV, which targets millennial on YouTube. Comcast would make an ideal parent for DreamWorks Animation, especially with its ownership of Illumination, maker of hit films Minions and Despicable Me.

Glendale, California based DreamWorks underwent a deep restructuring last year that reduced its workforce by 18% and cut the number of films it made after a series of flops. Under DreamWorks Animation, Illumination’s animators are largely based in Paris. With the acquisition, Universal gains a fully-fledged US based movie and TV producer and distributor.

Comcast would pay DreamWorks a fee of $200 Million if the deal is blocked by regulators. DreamWorks Animation would also provide a source of content for Universal growing theme park business. Universal already features Shrek rides at its parks in Florida, California, Japan and Singapore. The company is building a theme park in China, where Kung Fu Panda has been a big hit. 

Hello Curry acquires The First Meal

Quick service restaurant chain Hello Curry Pvt. Ltd has acquired The First Meal, a food and delivery startup which takes pre-orders for customized health food for cash and stock. The acquisition allows Hello Curry to enter the breakfast and meal box segment.

The food tech startup industry has been facing shutdowns. Lack of sustainable growth models in a fragmented market and harder customer acquisition has seen investors shying away too, after the initial euphoria. Hello curry which specializes in Indian food has been positioning itself as a quick delivery, hygienic, and convenient chain. This acquisition is Hello Curry attempt to draw a sustainable revenue model for the long term, even as its 33 outlets in Hyderabad, Pune, and Bengaluru remain profitable.

The company is in the process of raising $2-3 Million to take care of the regular growth plan in India and would separately raise funds for overseas expansion in a few months. The First Meal has a subscription platform and through their meal box concept it provides nutritious and consciously prepared food. Subscriptions can be profitable as the business as the business is predictable and Hello Curry would only leverage the existing kitchens and infrastructure it has to reach the subscription customers.

Through First Meal, the company aims to sell 5,000 meals every day, within the next six months. Currently First Meal serves five types of diet balanced breakfast items and daily changing nutritious lunches, tapping around 10,000 boxes a month, with 89% customer retention rate.

LogiNext acquires delivery portal YourGuy

Logistics and software company LogiNext has acquired YourGuy; a Mumbai based cross category last mile delivery startup. The acquisition is aligned for strengthening and expanding LogiNext last mile delivery platform Sprintr, launched last week.

Logistics management system Sprintr is a technology driven platform to both clients and delivery partners. Aggregating delivery capacity through providing technology to delivery companies, clients can now just push orders and delivery requests through the same software across India. This enables the big businesses to get their delivery sorted, while giving a business to their delivery partners free of cost.

The Sprintr platform has an active network of 250 delivery personnel on ground; the platform is managing close to over 5000 deliveries daily. Sprintr is currently operational in Gurgaon, Mumbai, Jaipur, and Ahmedabad, handling both pre-scheduled and on-demand orders. Founded in 2014, YourGuy is valued at $1.5 Million, while processing 4,000 deliveries per day, working for clients in segments including pharmaceuticals, documents, food, retail, laundry, and grocery.

Further, being a B2B delivery portal, it hosts clients like Godrej Nature Basket, iChef, Wellness Forever, Suburban Diagnostics, and several tiffin services. After the acquisition, LogiNext major task would be to upgrade the fixed expense model of YourGuy to an automated model, allowing users to sign up and start delivering automatically.

Freshdesk buys start-up Airwoot

Customer support software maker Freshdesk Inc. has acquired Airwoot, which help companies spot customer queries and complaints on social media that require urgent attention. Customer support on social channels is key for digital businesses and using platforms like Airwoot enables them to predict conversations that may go viral and take action.

Delivering customer support via Social media continues to be a challenge for many companies given the high volume of noise in the medium. Airwoot AI technology provides a powerful platform to power the social engagement centres of the future. Airwoot used by firms such as Snapdeal, Xiaomi Corp., Ola, Paytm, Grofers, Jet Airways, MakeMyTrip and Cleartrip.com will continue as a standalone product.

For Freshdesk, one of India’s most well-funded product start-ups, Airwoot from Memeticlabs Technologies Pvt. Ltd is the fifth acquisition in nine months. Last April, Freshdesk raised $50 Million from investors Tiger Global Management, Accel Partners and Google Capital, bringing its total funding to $90 Million. The company has been successfully integrating start-ups it bought, into its own product portfolio.

In February, Freshdesk rolled out a new product, Hotline.io, its third since its launch in 2011. Hotline.io was built on the back of its December acquisition of Konotor, which helps businesses chat with their consumer inside apps. Previously, Freshdesk has acquired Framebench, a file collaboration platform in February, Frilp, a social recommendation app in October and 1CLICK.io, a video chat platform in August.

CarDekho acquires Help on Wheels

Girnar Software Pvt. Ltd, which runs online auto classifieds portal CarDekho, has acquired roadside assistance firm Help on Wheels Pvt. Ltd, for an undisclosed amount. The acquisition comes two weeks after Girnar Software raised an undisclosed amount of funding from Google Capital.

The used car market in India is currently as big as the new car market. The report adds that first time buyers in India are increasingly opting for pre-owned cars. Companies operating in the used car space have been raising funds to compete in one of the fastest growing business verticals. Girnar acquisition will help the company compete against its rival Cartrade.com which raised INR 950 crore in funding led by Singapore based investment firm Temasek and March Capital.

The company had raised $30 Million in 2014 from a group of investors that included Tiger Global, Warburg and Canaan Partners. Help on Wheels was founded in 2014 and has a client base of 50,000. All the employees of Help on Wheels will be absorbed by CarDekho. Girnar Software, which operates other portals, including Zigwheels, Gaadi.com, Pricedekho.com and Bikedekho.com, had raised $50 Million in January 2015 from Hillhouse, Tybourne, and Sequoia Capital.

In the last two years, the company has acquired four other companies – Drishya360, Gaadi.com, Zigwheels and BuyingIQ. Other auto classifieds start-ups include Droom Technology Pvt. Ltd, which raised $16 Million in a round led by Lightbox in July last year and Truebil which raised $500,000 in its first funding round from KAE Capital in June last year.

Alaska Air to buy Virgin America

Alaska Air Group Inc. is nearing a deal to acquire Virgin America Inc. the ninth largest US Airline by passenger traffic, for more than $2 Billion, having outbid JetBlue Airways Corp. The acquisition would herald the first US commercial airline merger since US Airways and American Airlines combined in 2013 to form the world’s largest carrier.

It would boost the size of Alaska Air home market by allowing it to expand into lucrative hubs such as San Francisco and Los Angeles. Alaska Air is set to pay between $56 and $58 per share to acquire Virgin America. California based Virgin America went public in the US stock market in 2014 as an offshoot of London based Virgin Group. Launched as low cost US Airline, it became famous for its mood lighting, comfortable leather seats and media rich inflight entertainment system.

Based in Seattle, Alaska Air and its partner regional Airlines serve more than 100 cities in the United States, Canada, Costa Rica, and Mexico. It has a market capitalization of $10.2 Billion. Virgin America accounts for about 1.5 percent of US Domestic flight capacity, while Alaska Air and its subsidiary Horizon Air account for 5 percent. JetBlue accounts for 6 percent. Mega-mergers in the past decade have reduced the US industry to four top players that control more than 80 percent of the market.

Blackstone to acquire Mphasis

Private Equity player Blackstone has entered into a definitive agreement with Hewlett Packard Enterprise to buy a majority stake in Mphasis. This deal represents the largest acquisition by Blackstone in India. Based on the open offer subscription, the purchase price consideration will vary between Rs 5466 crore and Rs 7071 crore.

HPE also signed a master services agreement with Mphasis, committing business of $990 Million over a period of five years. The Duration of MSA is five years with three automatic renewals of two years each. Also, Mphasis will be included in HPE’s Preferred Provider Program, opening up significant additional revenue opportunities. HPE currently owns 60.5% of Mphasis. Blackstone will pay a purchase price of Rs 430 per share to HPE.

Mphasis has strong domain expertise in banking, financial services, and insurance vertical. Its deep relationship with marquee global consumers has enabled it to deliver growth above the industry average in its direct international segment. The company has an experienced management team who has a clear road map for company growth. With a long term commitment of company largest customer, HPE are confident that Mphasis will scale new heights.

HCL Technologies to buy Geometric Business

HCL Technologies has agreed to buy all of the business done by Mumbai based software firm Geometric Ltd, except a joint venture the latter has with Dassault Systems SA, in a share swap deal valued at $190 Million. The transaction will help HCL, the country fourth largest information technology firm, increase its business in the engineering services space.

Geometric accepted Noida based HCL Technologies offer of a share swap under which its shareholders will get 10 HCL shares for every 43 share they hold in Geometric. HCL will issue a total of 15.64 Million shares. HCL will get about 74% of Geometric total business and expects the transaction to be completed by the end of this year.

Geometric on its part, will merge into 3DPLM software solutions Ltd, its joint venture with Dassault Systems, thereby giving 100% ownership to the French Company. This will help HCL to scale up its offerings and win large deals from engineering companies. For promoters of Geometric, this marks the end of a three decade journey after Godrej set up Geometric in 1984 and incorporated it as an independent firm in 1994.

Upon completion of this merger, HCL Technologies will generate $1.34 Billion from engineering services and become the world’s third largest technology engineering outsourcing company. Geometric has not recorded any growth in revenue over the last two years despite the product engineering space growing at a health space, and for this reason most equity analysts questioned the rationale of the deal.

Flipkart acquires payments start-up PhonePe

E-commerce marketplace Flipkart Ltd has acquired Payments start-up PhonePe Internet Pvt. Ltd. which was launched last December by former Flipkart executives. Flipkart was in talks to acquire a majority stake in the company for an amount between $10 Million and $20 Million. The PhonePe team will join Flipkart but will function as an independent business unit.

Payments have been one of the biggest hurdles for mass adoption of online shopping in India. UPI has the potential of transforming the entire payments ecosystem in the country. The acquisition of PhonePe is in line with Flipkart focus on driving innovation on the payments front. PhonePe is Flipkart third acquisition in payments, after it bought payments start-up NGPay in 2014 and FX Mart Pvt. Ltd which owns a prepaid wallet license.

PhonePe hasn’t launched a product but is working on a payments solution around the Unified Payments Interface an initiative of the National Payments Corp. of India, which will allow fund transfer between banks and will make inter-operability between banks and instant payments possible by using a single identifier like the Aadhaar number or a virtual address.

The UPI is part of a set of government programmes and technologies, together called India Stack that companies use to slash costs in offline authentication and provide services legally approved by the government to anyone with a mobile phone. The UPI is set to be formally launched in April. PhonePe mission is to significantly improve the online and offline digital payments experience for Millions of Indian customers.

Wings Travels acquires Bookmycab

Pune based Wings Travels wingstravel.in Management Pvt. Ltd, which provides staff transportation services, has acquired taxi services company Bookmycab for an undisclosed amount. The acquisition will help Wings Travels expend into the radio taxi segment and strengthen its technological capabilities.

The merged entity will be rebranded as WingsTravels Bookmycab. It will be run by Mumbai based LiveMinds Technologies Pvt. Ltd, which owns Bookmycab. Wings Travels, which has been operating since 2001, primarily offered staff transports services to business process outsourcing firms. It has about 600 employees and offers its services in Mumbai, Pune, Gurgaon, Bangalore, Hyderabad, Chennai, Nagpur, Chandigarh and Ahmedabad.

The acquisition will help Wings Travels to expand its services to 47 cities in India and offer its radio taxi services in Yangon (Myanmar), Chiang Mai (Thailand) and Vietnam. While its Yangon operations commenced about three months ago, the Thailand operations are likely to start from the first week of May. 

Ola acquires Qarth

Taxi hailing service Ola, run by ANI Technologies Pvt. Ltd, has acquired Mobile payments company, Qarth in an attempt to strengthen its mobile wallet service Ola Money launched in November last year. Qarth, which runs a mobile payments app called X-Pay, is Ola second investment in the payment space.

The move comes at a time when e-commerce leaders such as Flipkart Ltd and Snapdeal are strengthening their payment business through acquisitions. Flipkart acquired a majority stake in payment services startup FX Mart Pvt. Ltd in September last year, while Snapdeal acquired utility payment service company Freecharge for $400 Million in March last year, in the biggest ever consumer Internet deal in India.

Ola Money cannot only be used to make payments for Ola rides, but also for other online platforms such as Online eyewear store Lenskart, hotel aggregator Oyo Rooms, music streaming app Saavn and hyperlocal electronics retailer such as Zopper. Such services throws open an additional revenue stream for Ola, with the ride hailing service still being loss making, and also puts the service in direct competition with bigger rivals such as Paytm and Freecharge.

Ola, which launched food and grocery delivery services last year, shuttered both verticals earlier this month to focus on its core offering of transportation. The move came amid growing competition from Uber, which claims about 50% of the Indian Market. The two companies have rolled out services such as ride sharing, carpooling and even bike taxis and have been slashing fares in an attempt to acquire customers.