Paytm’s $2M Bet On Local Services

Indian mobile payments company Paytm has acquired hyperlocal services startup Near.in in a $2 million deal to bolster its online-to-offline (O2O) services platform.

Near.in currently serves four metropolitan cities in India, including Delhi, Gurgaon, Mumbai and Bengaluru. Its one-year-old platform connects users with over 100 different kinds of service providers, ranging from handymen and pest control to fortune tellers and tattoo artists.

According to The Times of India, Near.in competes with some very well-funded companies, like UrbanClap, which secured $25 million in Series B funding last month, and other small players, like Housejoy, which secured $4 million in Series A funding in June this year.

The acquisition, which is the first Paytm has made since 2010, comes after Alibaba‘s recent investment in the Noida-based company that raised its total investment value to nearly $700 million, according to The Economic Times of India.

“O2O is a focus area for Paytm. Local commerce has massive potential in India, and this acquisition will help us grow the business even further,” said Kiran Vasireddy, senior VP and head of investments at Paytm.

The latest deal comes on the heels of a $10 million investment Paytm made in another hyperlocal delivery platform, Jugnoo, that utilizes a network of auto-rickshaws to provide delivery services. In June, Paytm invested $5 million in the service.

“This is a new category for us. All the companies acquired by us till date, have had a strong presence in the O2O space. This business is still a blue ocean for us,” Vasireddy added.

Paytm recently also partnered with Zomato to provide food services, including restaurant reservations and delivery, and with BookMyShow for events booking and movie tickets.

The company said it hopes to derive half of its revenue from its service-based offerings by 2016.