Future Enterprises Picks Up Majority Stake In Fintech Startup LivQuik For $2.71 Mn

In line with its Retail 3.0 business model Tathaastu, Future Enterprises (formerly Future Retail Limited) has acquired 54.98% stake in Mumbai-base digital payments startup LivQuik for $2.71 Mn (INR 20 Cr). Tathaastu will blend technology with brick-and-mortar while focusing on an online-to-offline (O2O) model.

According to BSE filings, Future Enterprises has also committed an additional investment of $679.9K (INR 5 Cr), if required, in LivQuik; the acquisition is expected to be completed in 24 months. Consequent to Future Enterprises’ subscription of the majority share capital in LivQuik, the latter will become a subsidiary of the former. The investment is subject to necessary intimations to the Reserve Bank of India.

Future Enterprises expects LivQuik’s digital payment instrument and payment gateway services to add value to its business.

Co-founded by Mohit Lalvani, Yudhajit Nag Sen, Vinay Pinto, and Suma Bhattacharya in 2012, LivQuik has developed QuikWallet, an app for offline payments that enables customers to pay at retail outlets and restaurants with their smartphones.

LivQuik is also involved in the development of specialised system software and application software.

Over the past three years, the company has been on a steady growth path as it recorded a turnover of $19.83K (INR 14,61,250) for FY16, $158K (INR 1,16,58,230) for FY17, and $230K (INR 1,69,62,934) for FY18.

LivQuik last raised $1.6 Mn in a round of funding from Snow Leopard Ventures in 2015.

Future Group: Combining Offline With Online

As one of the largest players in the offline model in India, Future Group has been receiving increasing attention from major global players such as Amazon.

The Mumbai-headquartered Future Group has a prominent presence in the Indian retail market and owns popular supermarket chains such as Big Bazaar and Food Bazaar and lifestyle stores like Brand Factory, Central, etc. It also controls a sizeable share of the country’s FMCG and integrated food sectors.

The company recently launched its new retail model Tathaastu with the aim of becoming Asia’s largest integrated consumer retailer by 2047 with revenues in excess of $1 Tn. Future Group also announced the plans to open 10,000 member-only Easyday stores.

For quite some time, reports have been doing the rounds that Amazon has initiated talks with Future Retail Limited to acquire a 10% stake in the company. At the same time, Future Group CEO Kishore Biyani announced his plans to close a deal with foreign investors for Future Retail; he did not disclose any names.

Earlier, in February, Inc42 had reported that Future Group was eyeing a strategic alliance with Amazon. Biyani also met Amazon founder Jeff Bezos in the US to initiate the discussions.

Also, Biyani’s Future Lifestyle Fashion Ltd (FLFL) entered into a conditional agreement with London-listed fashion etailer Koovs to buy an up to 30% stake in the company.

Apart from this, the Future Group is also planning to foray into the entertainment segment.

India’s Digital Payments Industry

In India, the demonetisation move of the Modi government in November 2016 gave a huge boost to the digital payments industry. The continued focus of the government on making India increasingly cashless by launching the Unified Payments Interface (UPI), incentives, and regulatory support for the industry has resulted in several aspiring and existing entrepreneurs experimenting with new digital payments technologies and solutions.

For the month of September, the UPI recorded 405.87 Mn transactions worth a total of $8.18 Bn (INR 59,835 Cr).

The potential opportunity in the industry can also be understood by looking at the phenomenal growth of digital payments decacorn Paytm — a company founded in 2010 which is now valued over $10 Bn in 2018.

In September, prepaid payment instruments or mobile wallets recorded 351.8 Mn transactions, up from 332.9 Mn in June and 350 Mn in May.

Government thinktank NITI Aayog in its report ‘Digital Payments – Trends, Issues, and Opportunities’ estimated the industry to grow to $1 Tn by 2023.

As Future Group looks at expanding horizontally as well as vertically, the investment in LivQuik is expected to help it add value to the digital payments industry.