MUMBAI: While the salt-to-software giant looks to strengthen its digital operations, it has been reported that Tata Group is considering investing an additional $2 billion in its mega app endeavour.
Should a deal go through, Tata Digital Pvt will receive the additional funding over a two-year period. One of the sources claimed that the additional funding might aid online platform Tata Neu, which launched last April, in expanding its digital products, resolving technological issues, and covering any unexpected expenses.
The individual, who asked to remain anonymous since the conversation involved sensitive information, claimed that Tata Group had urged Tata Digital to seek for ways to increase the valuation of the super app. The conglomerate may yet alter the size and timing of a deal, according to the sources, who said discussions are still in progress. Tata Group and Tata Digital representatives declined to comment.
Any further funding would come at a time when Tata Digital is reevaluating its strategy and battling established e-commerce competitors like Amazon.com Inc and Walmart Inc’s Flipkart. Modeled after China’s ubiquitous Alipay and WeChat, Tata Neu was India’s first super app since at least mid-2020 but rapidly encountered technical issues and user concerns. Reliance Industries Ltd. and the Adani group, two local powerhouses, plan to launch their own mega apps as well.
Users of Tata Neu can purchase goods from brands owned by Tata, including food, electronics, and reservations for restaurants and flights. The app offers financial services like bill payment, loans, and insurance, as well as membership services.
In its first year, Tata Neu is anticipated to achieve only half of the sales goal. In comparison to the $8 billion aim established at the start of 2022, the mega app will witness revenues of approximately $4 billion in the year to March 31, according to a January report from Bloomberg News.
Tata Group invested more than $2 billion in the last three years to buy businesses like e-pharmacy 1mg and e-grocer Bigbasket to strengthen its e-commerce portfolio. According to a 2020 Bloomberg News story, Tata Sons Pvt, the holding company of the firm, looked into enlisting financial or strategic backers, such as major international technology businesses, to support the super app.
