Online marketplace Snapdeal said it will buy mobile recharge service Freecharge to boost its mobile commerce business. Terms of the deal weren’t disclosed.Last month, media reports had pegged the deal value at $450 million. Freecharge, which competes with Paytm, boasts of daily mobile transactions of more than 1 million.
The company will continue to work as an independent platform after the deal is closed.
“Ninety per cent of Internet users in India within the next few years will be mobile only,” Snapdeal chief executive Kunal Bahl said. “It becomes very important to have a very strong mobile commerce strategy.”
Speaking on the acquisition, Kunal Bahl, Co-Founder & CEO of Snapdeal said “At Snapdeal, we are building an ecosystem that power billions of digital commerce transactions in the country in the coming years. 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.
FreeCharge had raised $80 million earlier this year in February 2015 which took its total funding to $120 million where Snapdeal has raised almost $1.1 billion, including the massive $627 million funding round of 2014 October.
Snapdeal has been on an acquisition spree over the past six months, investing into or wholly buying three firms—software provider Unicommerce, logistics service company GoJavas and luxury fashion marketplace Exclusively. With the acquisition, Snapdeal would become “the largest mobile commerce company in India,” the company said in a statement.
Kunal Shah, Co-Founder & CEO of FreeCharge 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.
It’s a cash plus stock deal with the majority of it in stocks and only a small part in cash. Integration will take almost six months.The 200 employees of FreeCharge continue with the company which will now witness some aggressive hiring. This could be one of the biggest M&A in the Indian internet ecosystem.
Digital Magazine for startups and small businesses. Bizztor creates & curate content for entrepreneurs looking to start and grow a business.