E-commerce firm Infibeam Incorporation Ltd has decided to invest Rs 60 crore (around $8.9 million) in Avenues India Pvt Ltd that operates payment gateway CCAvenue.
Infibeam’s wholly owned subsidiary NSI Infinium Global Pvt. Ltd has signed a definitive agreement with Avenues India for the investment, the company said in a stock exchange filing.
The investment has been raised from an initial commitment of Rs 45 crore, which was announced last month.
On May 30, Infibeam informed BSE: "Infibeam’s wholly owned subsidiary NSI Infinium Global has signed a term sheet with Avenues India for investment of Rs 45 crore, and is in talks for a definitive agreement. The percentage of stake to be bought will be finalised in the definitive agreement."
However, the company is yet to disclose the percentage of the stake it bought in Avenues India.
Infibeam Incorporation is the parent of horizontal e-commerce platform Infibeam and DIY ecommerce platform BuildaBazaar. Infibeam already has a joint venture with Avenues India that runs the online marketplace Dhamaal.com, where merchants sell their products and promote their brands.
Last month, while announcing its plan to make an investment in CCAvenue, Infibeam said: "CCAvenue is a leading payment processing solution provider for thousands of merchants across business verticals. Under the business model of e-commerce, the role of payment processor is crucial in completing the financial transactions after the purchase is made by the customer. The payment integration is important for the merchant in expanding his merchandise which, on the other hand, results in higher sales. The advantage to Infibeam would be in form of incremental revenue by way of integration for customers shopping on BuildaBazaar merchant store and also on Infibeam.com."
Infibeam's consolidated net sales jumped 17% to Rs 336.14 crore during FY2015-16 from Rs 288.20 crore in FY2014-15. The company swung to a net profit of Rs 9.25 crore in FY2015-16 from a loss of Rs 10.11 crore the previous year.
Infibeam’s Rs 450 crore initial public offering (IPO) received lukewarm interest from investors in March this year, but the company—one of the youngest firms to go public—made its stock market debut with gains in April. In addition, Next Orbit Ventures invested Rs 115 crore in Infibeam in April as part of its IPO, picking up around 5% stake in the e-commerce company.
Founded in 2010 by former Amazon executive Vishal Mehta, Infibeam restricted itself from raising private capital, unlike its peers. Besides, it did not get too aggressive in customer acquisition to drive the B2C business and has been especially pushing the B2B e-commerce enabler platform BuildaBazaar.
The company is promoted by a Gujarat-based affluent family whose business interest straddles a dealership for Toyota cars. Infibeam promoters, who held a 56.63% stake before listing, now own 45.5% of the company.
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