Amazon is looking to purchase Catamaran Ventures’ stake in Prione, the parent company of one of Amazon India marketplace’s largest sellers – Cloudtail. The e-commerce giant is seeking regulatory approval from India’s antitrust watchdog to buy the stake as the two firms, Catamaran Ventures and Amazon, have announced that they won’t be renewing their joint venture after May next year.
Catamaran ventures own a 76 percent stake in Prione, while Amazon owns 24 percent stake in the latter. Amazon once owned a 49 percent stake in Prione but had to cut it down to 24 percent so as to comply with local laws that prevent e-commerce companies from owning, either directly or indirectly, businesses that sell on their marketplace. The announcement that Amazon is looking to purchase Catamaran Ventures’ stakes, therefore, comes as quite a surprise!
A joint statement by Amazon and Catamaran Ventures said that the two companies are complying with all applicable laws “including all assets and liabilities” to close the deal and have sought approval from the country’s regulatory body.
The joint venture was launched in 2014 by Amazon and Catamaran. The joint venture restructured its ownership in 2019 following India’s regulatory changes and in August this year, the two said they were ending the relationship.
This announcement came on the heels of a report by Reuters that Amazon had, for years, given preferential treatment to a small group of sellers including Cloudtail, and has used them to bypass Indian laws. Last year, the Competition Commission of India launched an investigation into Amazon and Flipkart for allegations that they were promoting selected sellers in which they owned a stake and were manipulating the competition.
“The businesses of the joint venture shall continue under the leadership of the current management and on receipt of regulatory approvals, the board of Prione and Cloudtail will take steps to complete the transaction in compliance with applicable laws,” the joint statement from Amazon and Catamaran said.
Cloudtail remains one of the largest sellers on Amazon in India. It has enabled over 300,000 sellers and entrepreneurs to go online and provided 4 million merchants with digital payment capabilities, according to Amazon and Catamaran.
Ibhadojemu Lucky Emmanuel is a graduate of Education and Economics from the University of Benin. He has a passion for tech and business and has been writing professionally for over a period of five years. He's written across various topics and segments and knew tech-business was it when he first stumbled on it. He has a great passion for music and arts, and wants to visit as many countries as he can someday.
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