SUMMARY
In October 2023, Tata Group considered an additional investment of $1 Bn in its super app, Tata Neu
Tata Sons has invested more than $2 Bn in Neu so far and has board approvals for further capital infusion over five years
This development comes at a time when Tata Digital has been witnessing a series of exits at the top level
Salt-to-software conglomerate Tata Sons is looking to infuse around $1 Bn into its digital arm Tata Digital over the next few years.
This comes days after the parent of the Tata Group hit the pause button on external fundraising for the ecommerce entity housing the superapp Tata Neu.
In October last year, Tata Group considered an additional investment of $1 Bn in its super app Tata Neu.
Tata Sons has invested more than $2 Bn in Neu so far and has board approvals for further capital infusion over five years, ET reported, citing sources familiar with the matter.
In 2022, Tata Digital raised its authorised share capital from INR 15,000 Cr to INR 20,000 Cr aiming to secure additional funds from Tata Sons. In the same year, Tata Sons invested INR 5,882 Cr in Tata Digital.
The move comes as the company undergoes a review of its digital strategy following the recent appointment of a new CEO earlier this week. As per the report, Tata Digital will only tap external investors after the new CEO sets down to focus on execution and scale.
This development comes at a time when Tata Digital has been witnessing a series of exits at the top level. Recently, Tata Digital’s chief software architect Pavan Podila and Samir Aksekar, chief information security officer, have resigned.
Meanwhile, Tata Digital appointed Naveen Tahilyani as its new CEO and MD.
In October 2023, Rajiv Subramanian, who was then leading Tata Neu’s travel division, also stepped down from his position. Prior to that, other senior executives, including Prateek Mehta and Sharath Bulusu, also parted ways with the company.
This development also coincides with Tata Neu, preparing to enter the online food ordering service through the open network for digital commerce (ONDC) route.
Launched in April 2022, Tata Neu draws inspiration from China’s Alipay and WeChat. It consolidates various services, including hotel and flight reservations, grocery and electronics, and pharmaceuticals, under one umbrella.
However, the app was marred by multiple glitches, poor user experience and other challenges at the time of its launch. Since then, the app has reportedly not picked up considerable pace and is yet to gain any significant market traction.
Meanwhile, Tata Digital logged a 5.6X YoY jump in its consolidated net loss to INR 3,052 Cr in FY22 even as income tripled YoY to INR 16,201 Cr during the period.
