Indian eCommerce company Snapdeal has acquired mCommerce payments firm Freecharge for an undisclosed amount. However according to some sources the acquisition was made for $450 million in cash and stock.
The rumours of this deal were doing rounds in the media in the last few weeks, but while Freecharge held onto its silence, Snapdeal turned them down calling them ‘speculations’. Freecharge’s founder Kunal Shah announced this development on social media via a Facebook post. (shown below)
Accelyst Solutions Pvt. owned FreeCharge had raised $80 million in series C round in February this year. Till date before the acquisition, the firm had secured a total of $120 million from Sequoia Capital, Ru Net, Sofina, Valiant Capital and Tyborne.
Jasper Infotech which owns Snapdeal has secured a total funding of $1.1 billion in 8 rounds from 16 investors including Bessemer Venture Partners, Indus Ventures, Nexus Venture Partners among others. In October 2014, it had received $627 million from Japanese telecom and internet corporation, Softbank.
The acquisition might spell trouble for Amazon, Flipkart who are trying to go strong on their mobile strategy and for Paytm, Freecharge’s direct rival which entered the retail space last year. Paytm is backed by Alibaba, and Snapdeal too was in news recently regarding Alibaba showing interest in this eCommerce company as well. However the deal did not go down, and the speculations died out. With the acquisition of Freecharge, Snapdeal too would have a Paytm like model with payments, recharges and eCommerce integrated. Looks like the digital commerce space is getting heated up in India.