Indian Online Marketplace Snapdeal Becomes Largest M-Commerce Player In The Country
Online marketplace company Snapdeal has acquired a Bangalore mobile recharge service, Freecharge, on Wednesday in a stock plus cash deal.
This makes Snapdeal the largest mobile commerce company in the country. News reports estimate the deal at $400 million, though both companies refused to comment on the valuation.
Already, 75 percent of Snapdeal’s orders – for everything from books to clothes to shoes – are made by customers through their cell phones. The company expects it to go up to 85 percent this year.
Bangalore’s Freecharge is a mobile transactions company. It allows customers to recharge their prepaid cell phones and data cards. It also enables them to pay their cell phone, utility and Internet bills. For every transaction on Freecharge, the customer gets coupons or free deals from about 300 brands across multiple categories like travel or food or fashion. The deals come from companies like McDonalds, Café Coffee Day and Domino’s Pizza. Freecharge has 20 million users.
Together, Snapdeal and Freecharge will now have one million transactions a day and they will have access to 40 million cell phone users.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,” Snapdeal co-founder and chief executive, Kunal Bahl said in a release.
As per the deal, Freechage will be a wholly-owned subsidiary of Snapdeal but will continue to operate independently. Freecharge was founded in 2010 by Kunal Shah and Sandeep Tandon and has raised over $120 million in financing in the last four years from the likes of Sequoia Capital and RuNet.Snapdeal for its part has marquee investors. Japan’s SoftBank had invested $627 million in Snapdeal in October. Ratan Tata, BlackRock BLK +0.3% and Premji Invest also hold stakes in Snapdeal, which was founded in 2010 by Kunal Bahl and Rohit Bansal. It sells 11 million products across 500 categories. Snapdeal had recently roped in Bollywood actor Aamir Khan as its brand ambassador.