1. Paytm in talks to snap up Snapdeal’s payment wallet

Paytm in talks to snap up Snapdeal’s payment wallet

Snapdeal is understood to have received a definitive agreement from Alibaba backed One97 Communications which operates Paytm to acquire the former's payment wallet business Freecharge.

By: | Published: June 1, 2017 7:19 AM
Japser Infotech, Paytm, Payment wallet, mobile wallet firms, mobile wallet firms in India, One97 Communications, Snapdeal, Snapdeal’s payment wallet Sources explained that the size of the deal is believed to be valued at million, adding that both the parties have understood to have initiated discussion related to share purchase. (Image: Reuters)

Japser Infotech which runs the e-commerce platform Snapdeal is understood to have received a definitive agreement from Alibaba backed One97 Communications which operates Paytm to acquire the former’s payment wallet business Freecharge, said sources close to the development. Sources explained that the size of the deal is believed to be valued at $50 million, adding that both the parties have understood to have initiated discussion related to share purchase. “At the same time, Snapdeal is reportedly in talks with other parties including public sector banks and other companies, including Times Internet, as it looks to strike a better deal,” observed the source.

It is believed that Snapdeal first approached Paytm for the sale of Freecharge in February this year, after its talks with PayPal fell through. However, with conversations not leading into any conclusion, the company in the last few months is understood to have tried to struck a deal with other players including MobiKwik, Bank of Baroda, amongst others.

Denying the above report, a Freecharge spokersperson said, “Freecharge is currently engaged with multiple interested parties and expects to conclude a deal in the near future.” While an email sent to Paytm did not elecit a response till the time of going to press. It should be noted that in 2015 Snapdeal acquired FreeCharge for an estimated $400 million (Rs 2,400 crore). At the time, the deal was struck in 80% stock and 20% cash.

In may this year, SoftBank Group invested $1.4 billion in Paytm in lieu of 20% stake in the company. Post raising fresh investment, Paytm is currently valued at $7 billion post-money.

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Early this month, SoftBank at its annual earnings call said it had incurred losses of $1.4 billion (¥160.419 billion) on investments in e-commerce player Snapdeal and taxi aggregator Ola in the period to March 2017. The losses compare with a gain of $1 billion (¥114.377 billion) in 2015-2016. Freecharge, reported a loss of Rs 235 crore on a revenue of Rs 36 crore for the year ended March 2016. The company in FY15 posted losses of Rs 269 crore on the back of revenues of Rs 35 crore.

  1. S
    sasmita
    Jun 1, 2017 at 4:44 pm
    Snapdeal is trying their best to save their both companies freecharge & snapdeal from merger. But time will tell everything. Snapdeal founders are trying their best to save their employees job also they have announced if the merger happens then they will share the profit with their employees. This is the nature of a great leader. Anyway if anyone wants to buy from sanpdeal but doesn't have discount coupons & offers then visit 27coupons . You will find all active & updated Sanpdeal coupons & Snapdeal offers at 27coupons. Thanks
    Reply
    1. S
      ss
      Jun 2, 2017 at 9:14 am
      hahaha employees wont get a single rupee.
      Reply
    2. vadrevu seethapathi rao
      Jun 1, 2017 at 9:04 am
      verygood
      Reply

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