Snapdeal is in advanced talks to buy online mobile recharge platform Freecharge for $450 million (Rs 2,800 crore) in what will be the biggest deal in India’s consumer Internet industry, according to two people involved in the transaction.
The deal will cement the Delhi-based marketplace’s reputation as an acquisitive and ambitious company as it takes on Flipkart and Amazon for leadership in India’s online retail business. “The two companies have signed off on the deal,” said one person privy to developments. “It will be a combination of about 40% cash and the (balance) in stock.”
So far, Delhi-based Jasper Infotech, which owns and operates Snapdeal, has announced five acquisitions and is expected to match that number in the coming fiscal.
The biggest deal in the consumer internet space so far is Flipkart’s acquisition of fashion portal Myntra for an estimated $370 million (Rs 2,300 crore) in May 2014.
Backed by Japanese conglomerate SoftBank, which invested $627 million (Rs 3,800 crore) in the company last October, Snapdeal is looking to build compete competence in the mobile and data analytics space.
Freecharge, founded in 2010 by serial entrepreneur Kunal Shah and Sandeep Tandon, head of technology conglomerate Tandon Group, is backed by Sequoia Cap and hedge funds Valiant Capital and Hong Kong-based Tybourne Capital Management which is also an investor in Snapdeal.
Last month, Freecharge, now led by CEO Alok Goyal, raised $80 million (Rs 496 crore) in funding, as it looks to increase its customer base by two to three times from the current 20 million. The Bengaluru-based company offers promotions or discounts from restaurants and retailers every time a customer uses its platform for a recharge.
This news was first reported by Economic Times. You can read the rest of the article here.
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