Amazon India is in advanced talks to buy a minority stake in gift card technology and retail firm QwikCilver Solutions, reports the Economic Times. This deal, if successful, will be Amazon’s first investment in an Indian startup.

A person directly aware of the talks told Economic Times "Amazon could pick up about 20% in QwikCilver."

The Bangalore-based company has raised an undisclosed amount of funding from Accel Partners and Helion Venture Partners. 

It was founded in 2008 by Kumar Sudarsan, TP Pratap and Bhaskar Vasudevan, all three alumni of BITS-Pilani. QwikCilver provides backend technology for the gift card business of several retailers including Shoppers Stop, Lifestyle, Westside and Croma. The company which retails electronic and physical gift cards on its online site GiftBig, also has on offer gift cards of Amazon and Flipkart.

A undisclosed source told the Economic Times, "Amazon has promised to let them run as a separate business where they can continue to service other clients, including Flipkart."

According to the report the valuation is expected to be about two to three times the projected net income plus a premium of about 20% as this is a strategic investment.

QwikCilver aims to reach Rs 1,000 crore in overall transactions this fiscal. According to a white paper published by QwikCilver earlier this year, the Indian gift card industry is estimated to grow to Rs 9,000 crore by 2016.

"Gift cards are a very important vertical for Amazon globally. In India, there is a challenge in the form of the requirement of a RBI licence." Neither Amazon nor Flipkart can obtain a licence to issue prepaid payment instruments to store cash that can be used for transactions on multiple platforms. Others who have the licence in India include Paytm and Mobikwik.