Indian e-retailer Snapdeal.com said on Wednesday it bought online mobile recharge firm Freecharge...
Snapdeal today said it has acquired mobile transactions platform FreeCharge in a ‘cash and stock’ deal, marking “one of the largest acquisitions” in the Indian digital commerce space.
The company claimed this to be one of the biggest acquisitions in the history of the Internet industry in India but did not disclose the deal size.
With the acquisition, Snapdeal becomes the largest mobile commerce company in India, offering the widest range of products and services, including financial services and mobile recharge with an exponentially growing user base of over 40 million, the company said.
“Snapdeal and Freecharge combine to form the largest m-commerce company in India now,” Snapdeal CEO & Co-founder Kunal Bhal told reporters here.
Speaking on the structure of the deal, Bahl said, “it is a cash plus stock deal… majority of it is stock and minority is cash.”
“With this game-changing partnership with FreeCharge, we have significantly enhanced our user base and now offer all our customers access to the widest selection of products and services online, making digital commerce an even more intrinsic part of their lives,” he said.
He said Snapdeal has about 5,000 people and FreeCharge about 200, adding all FreeCharge team members are continuing and will continue as “actually we are going to grow the team at FreeCharge significantly over the next one year.”
FreeCharge will continue to function as an independent platform and all aspects of FreeCharge’s shopping experience will remain intact.
The firms will collaborate to offer a seamless shopping experience to customers across both the platforms offering an even wider range of products and services, it said.
Last week, Snapdeal had picked up majority stake in digital financial products platform — RupeePower — for an undisclosed amount through a stock and cash deal, foraying into the Indian online financial services market.
In the same month, it had also acquired majority stake in logistics firm GoJavas for an estimated Rs 150-200 crore.
Snapdeal, which received USD 627 million funding from Japan’s SoftBank last year, has investors suh as Tata Group chairman Emeritus Ratan Tata, eBay, Tybourne, Myriad, Blackrock Inc, Temasek and Premji Invest.
It claims one lakh sellers on board.
According to industry body IAMAI, the etailing market has grown at a CAGR of 33 per cent from Rs 2,372 crore in 2010 to Rs 10,004 crore in 2013. It further grew by 1.4 times to touch Rs 24,046 crore at the end of December, 2014.
Asked about the role of Kunal Shah, FreeCharge Co-Founder & CEO, and if the board would be reconstituted, Bahl said “Kunal Shah will continue running the company as he has been until now leading the business; in terms of Directors etc, that is something I will have to refer to our team. What is important is who has operating control of the business-that is with Kunal Shah.”
On FreeCharge investors, Snapdeal Co-Founder Rohit Bansal said, “most of them have come on board to partner with Snapdeal; which is a great sign for us, because they want to continue.”
Stating that with this partnership Snapdeal’s targets will get multiplied, Bahl said, “….this year we will be even more aggressive, with this additional arm and leg and very very strong grey matter and a very powerful platform….we feel that we can really accelerate our business multi-fold.”
Kunal Shah said, “The partnership with Snapdeal comes at the right time; I foresee this as an opportunity to accelerate our road map in India and reach out to millions of users across the country. As a brand, Snapdeal has a massive recall and we are very excited to be a part of the team that is creating the biggest digital ecosystem of the country.”