In a rebranding that follows an ownership change, deals platform Groupon India will now be called nearbuy, after venture capital firm Sequoia India pumped Rs 100 crore into Groupon India for a significant minority stake that will also give it a majority voting interest, Groupon disclosed in a filing to the US stock regulator. Groupon will continue to hold a large minority stake while founders will own the rest, said Ankur Warikoo, co-founder and chief executive, nearbuy, who was also leading the deal platform's operations in India for over three years. The US parent will not receive any cash in this deal, but it expects to recognise a pre-tax non-operating gain ranging from $13 million to $17 million. Groupon said in its filing to the US stock regulator, ‘‘Except for that gain, the deconsolidation of Groupon India will not have a significant impact on the company's financial position or results of operations. The company has made an irrevocable election to account for its retained investment in that entity at fair value with changes in fair value reported in earnings.'' This is Groupon's second deal with a private equity investor, after it sold 46 per cent stake in South Korea's No 2 mobile commerce company Ticket Monster to a group led by private equity firm KKR Co. The US company had indicated that it is looking at doing similar deals in some other Asian markets. ‘‘It wants to maximise the value of its assets. India is a massive market, which calls for investments. It has $1.2 billion in cash; being a listed firm with a portfolio of 48 countries has its pressures. Instead of holding 100 per cent in a small firm that is just one of 48 markets, it could have a large minority stake in a bigger company,'' says the chief executive of a deals platform. Nearbuy will continue to offer location-based deals (that Groupon offers), but will also add new services. Overall, it will offer deals in 18 categories, including food and beverages, travel, wellness, as well as new local service such as home and automobile services, online food ordering, movies and in-store shopping. ‘‘There's no change in the business model. India offers a massive opportunity.
All of us are buying services in the offline world — eating out, movies, spas, health and fitness, travel, home and other services, in-store services. We want to do in services what Flipkart has done with products,'' says Warikoo. Besides him, the leadership has five other founders. Commenting on the announcement, Mohit Bhatnagar, managing director, Sequoia Capital India Advisors, said, ‘‘Tens of thousands ofservice and retail establishments across India have a new friend in nearbuy. Thismobile first platform will cause more consumers to walk into their stores,spas, hotels, movie halls and help them sell more products and services. Theunique nearbuy platform is all about hyper local discovery, discounts andfrictionless payments.''‘‘This we believe is an untapped billion dollar marketopportunity. nearbuy is best poised to exploit this opportunity, given thestrong foundation Ankur and team have built with Groupon India,'' he further added. Rebranded as nearbuy , the company will expand itsreach to 35+ cities, from 12 today. In 2014, the company sold over 7 millionvouchers with a redemption rate of 97% amongst its customers, a key differentiatorwith rivals. Mobile accounts for 40 per cent of Groupon India business, up fromless than 10% a year ago. The nearbuy leadership team will comprise six Co-Founders; Ankur Warikoo CEO,Sumeet Kapur CFO, Snehesh Mitra CTO, Sachin Kapur CMO, Ankur Sarawagi CBO(Travel & Products) and Ravi Shankar CBO (Local Commerce). They will takecharge of delivering the ultimate nearbuy experience to consumers, ensuringquality deals at the convenience of a click.