If some rumours doing round the market are to be believed, Amazon India is all set to buy a minority stake in QwikCilver Solutions, a gift card technology and retail firm. This deal, if finalized, will mark the Seattle based firm’s first investment ever in an Indian Startup. Amazon India is currently facing tough competition from Snapdeal and Flipkart in the Indian Online retail business. Amazon will reportedly buy 20% stake in QwikCilver.
QwikCilver Solutions is a Bangalore based Company which was founded by Bhaskar Vasudevan, Kumar Sudarsan and TP Pratap in 2008. The firm provides various retailers like Croma, Shoppers Stop, Lifestyle and Westside etc. with backend technology for their gift card businesses. According to some sources, the company was also approached by Flipkart but in the end talks progressed with Amazon. The firm retails physical and electronic gift cards online on its site GiftBig. QwikCilver also has on offer gift cards of Flipkart and Amazon.
"Amazon has promised to let them run as a separate business where they can continue to service other clients, including Flipkart", said a source to Economic Times.
QwikCilver Solutions has recently raised an undisclosed amount of funding from its two main investors, Helion Venture Partners and Accel Partners.
The valuation of this strategic investment will be about two to three times the projected net income including a premium of about twenty percent. The Bangalore based startup has an aim of reaching Rs. 1,000 crore in all its transactions this fiscal.
Amazon and Flipkart have accumulated huge investments this year in order to escalate their way to the top position in the Indian online retail business. Amazon has received $2 billion from its parent investor and Flipkart has raised around $1.2 billion this year.
Gift cards are a very important vertical for Amazon on the global level but in India, the requirement of a Reserve Bank of India license acts as the primary hurdle. According to a white paper published by QwikCilver Solutions, by 2016 the Indian gift card industry could grow to a whopping Rs. 9,000 crore.
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