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Infibeam on course to acquire CC Avenue; our take

There's more consolidation in the payments space in the offing, and it's becoming evident that standalone payment gateways will find it difficult to survive in a low margin business. E-commerce marketplace and SAAS major Infibeam has entered into a memorandum of association with Avenues (India), which runs the payment gateway business CC Avenue; following a deal in May last year where Infibeam put in Rs 45 crore into Avenues, the company has now put in an additional Rs 150 crore, for 7.5% share in the company. Around 3.85% had been already held in the company by an Infibeam subsidiary. It is moving towards an acquisition, adding that "Subsequently, amalgamation of CC Avenue into Infibeam by issuance of fresh shares subject to due diligence and regulatory approvals." At Rs 150 crore for 7.5%, the deal values CC Avenue at Rs 2000 crore. Some thoughts on this deal: 1. Vertical integration for Infibeam: CC Avenue has historically been one of India's largest payment gateway providers, proving an important interconnect between merchants and banks; Avenues allows over 100,000 merchants to collect payments, typically using debit and credit cards. Infibeam had over 66,000 merchants by the end of Q3FY17, and the acquisition will allow the company to add its own payment gateway services to its mix of offerings to merchants, along with its SAAS platform BuildABazaar. This is a form of vertical integration for Infibeam, which says: "With payment platform of CC Avenues, Infibeam is a unique one-stop solution provider in the e-commerce segment…

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Founder @ MediaNama. TED Fellow. Asia21 Fellow @ Asia Society. Co-founder SaveTheInternet.in and Internet Freedom Foundation. Advisory board @ CyberBRICS

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