Ecommerce company Snapdeal has acquired mobile recharge platform Freecharge in an estimated $450 million deal.
Snapdeal has acquired mobile recharge platform Freecharge in the biggest Indian buy out in the consumer Internet space. The financial details about the deal were not revealed however sources claims that it would be worth over $450 million in cash and stock.
FreeCharge, which competes with Paytm, has over 20 million users who use the platform to make their mobile and utility payments across major operators. The company offers a convenient solution to millions of consumers making mobile recharges and claims over 1 million daily transactions. In India 75 million mobile recharges are done every day for 800 million mobile phone subscribers, out of which only 3 million recharges are done online, giving the company a lot of potential to grow.
Snapdeal, backed by Japan’s SoftBank Corp. and eBay, has about 40 million users and 100,000 merchants selling a wide range of products from smartphones to cars on its site. The acquisition of mobile platform FreeCharge will give snapdeal an edge over rivals Flipkart and Amazon Inc, making it one the largest mobile commerce company in India.
Kunal Bahl co-founder and chief executive of Snapdeal said in a statement, "The deal will help Snapdeal offer all our customers access to the widest selection of products and services online.”
Speaking about the announcement, Kunal Shah, Co-Founder & CEO, FreeCharge said, “FreeCharge is at the forefront of the mobile commerce revolution which is taking place in India right now. We have been ahead of the curve and as a result, 85% of our transactions originate from mobile, these transactions have very high repeat customer behavior. 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. FreeCharge’s success was enabled by a team of 200 extremely talented professionals and I would like to extend a special thanks to Alok Goel, Sandeep Tandon and a wonderfully supportive investor base.”
A recent IAMAI report has stated that the Indian ecommerce industry is expected to grow by 33 percent to cross Rs 1 Lakh crore by year end. Indian companies like Flipkart and Snapdeal have seen valuations in billions of dollars, leading to multimillion dollar acquisitions in the industry.
Online retailer Flipkart acquired Myntra in a $300 million deal last year in June, while Amazon was in talks to acquire fashion retailer Jabong.com. These acquisitions are happening at the time when mobile internet users are rising in the country.
According to a report, India will have over 213 million mobile internet users by June 2015 and this number will increase to 500 million by 2018. Mobile transactions are also on the rise in the e-commerce segment with online retailers like Flipkart and Myntra claiming that 70 percent of their sales are via smartphones.
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Silky Malhotra
Silky Malhotra loves learning about new technology, gadgets, and more. When she isn’t writing, she is usually found reading, watching Netflix, gardening, travelling, or trying out new cuisines. View Full Profile
