Chennai: Kunal Shah-owned Cred has acquired Chennai-based liquor purchase and delivery startup HipBar.
Sources in the know said the move follows the fintech unicorn’s plans to foray into the wallet payments business with the prepaid payment instrument license held by HipBar. The financial contours of the transaction is not known but it is learnt that it is a 100% buyout of HipBar and will see Kunal Shah joining as a director in the company. While the specifics of the integration were not immediately clear, the entire tech stack will be acquired and the team of HipBar including founder Prasanna Natrajan are set to join Cred and no layoffs are planned, a source said. “Cred has no intention to get into the liquor delivery business,” the person added.
The deal follows HipBar’s decision to exit the liquor delivery business burdened with regulatory hurdles in such a model across states. Cred’s interest in the startup comes from its plans to add a layer of payment wallets to its platform using HipBar’s PPI, which will allow them to offer cashbacks to consumers. A PPI license, granted by the RBI, allows companies to operate payments systems such as digital wallets, pre-paid vouchers, etc.
HipBar and Cred declined to comment on ToI’s queries on acquisition. Global spirit major Diageo, which acquired a 26% stake in HipBar in 2018, exited the startup earlier in July this year, selling its entire ownership to HipBar promoter Natarajan. HipBar had a turnover of over Rs 50 lakh in fiscal year 2020.
As an early mover in the liquor delivery space, HipBar’s journey has been marred with litigation
over the years. While it was operating in West Bengal and Odisha markets, it had to stop services in
Karnataka due to pushback from local retailers.