The following article is based on my own interpretation of the said events. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.
Anjana Jaladi,MBA 2014-16, Vinod Gupta School of Management, IIT Kharagpur.
Business Standard reported that India Value Fund (IVF) which recently invested $50 million (over Rs 300 crore) in Meru, will divulge its stake to make way for Aliababa. Alibaba’s interest to invest in Meru, comes after its prime investor’s Softbank’s investment in Ola.
In cab service market , building a supply chain takes a lot of time and investment.So only those investors with deep pockets like Alibaba can afford such deals.With the recent Ola’s acquisition of TFS and investors interests in the cab service market ,I think a lot of consolidation is going to happen in this business which will help in easing out the on going stress in the cab services.
To continue it’s leadership in this space, Meru can longer rely on safety, GPS, mobile app etc.Because these are no more differentiation factors. The customers expect them .So probably this investment from Alibaba can be used for innovations to penetrate further into the price sensitive Indian market. So there is long way for Meru to ride along with Alibaba.
References : http://inc42.com/buzz/meru-in-talks-with-alibaba-for-investment-seeks-valuation-of-400-mn/