The impending Snapdeal sale hasn’t been short of theatrics with several performers playing cameos intermittently. We still don’t know who the star performer is though. It’s been half a year since the struggling online marketplace started looking for a buyer who could pick up its e-commerce unit (Snapdeal), its logistics arm (Vulcan Express) and its payments solution (Freecharge) — which Snapdeal had acquired in 2015 for $400 million.
Earlier this year it was rumoured that global payments giant PayPal was in talks to pick up a 25 percent stake in Freecharge; then there were reports that India’s leading mobile wallet Paytm had signed a “non-exclusive term sheet” to acquire Freecharge for $40-50 million. And now, the mother of all names is doing the rounds. A Bloomberg report claims that Amazon has bid for Freecharge and has offered it $50-80 million. This comes soon after reports suggested that Axis Bank had emerged as the front-runner to buy Freecharge for $60-65 million. BGR India has reached out to Freecharge for comment. ALSO READ: Snapdeal keen on Infibeam buyout while Softbank pushes for Flipkart: Report
Amazon has just started operating its mobile wallet, Amazon Pay, in India after securing a license from the RBI in April. If the deal goes through, Amazon will most likely integrate Freecharge with Amazon Pay. Freecharge’s point-of-sale reach will help Amazon expand its wings in the hugely competitive digital payments market in India. Freecharge announced in June that it had crossed 500 million transactions exceeding $1.2 billion in value. ALSO READ: Amazon India to allow UPI payments within a month: Report
For Freecharge, all buyout offers so far are a significant downgrade from the $400-500 million that Snapdeal had paid to acquire it in 2015. At the time of the deal, both companies said they were forming “India’s largest m-commerce company”. It was then the biggest acquisition in the Indian startup space. However, Snapdeal’s struggles to stay afloat ended up devaluing Freecharge a great deal. The Gurgaon-based firm that had reached peak valuation of $6.5 billion in February 2016 might end up selling itself for under $1 billion.