In a deal pegged as the largest acquisition so far in the Indian B2C internet sector, e-commerce major Snapdeal has acquired online mobile recharge platform FreeCharge, which will result in the former significantly buttressing its target consumer database, while also developing a critical mass in an increasingly competitive e-commerce marketplace.
Snapdeal reportedly paid over Rs 2,800 crore ($450 million) in cash and stock to buy out MumbaI-based Freecharge, which was founded in 2010 by Kunal Shah and Sandeep Tandon.
“We want to target the new tsunami of users who are going to come on to the internet. This (acquisition) improves our ability to acquire users at a significant velocity at a very low cost,” Kunal Bahl, cofounder and CEO, Snapdeal, was quoted saying.
FreeCharge has raised nearly $116 million from investors, including San Francisco-based hedge fund Valiant Capital Management, Hong Kong-based hedge fund Tybourne Capital Management, Sequoia Capital, RuNet and Sofina.
This takeover is the latest in a spate of acquisitions by Snapdeal in 2015; the company acquired fashion portal Exclusively.in, put in a majority stake in financial services player RupeePower, and also invested in logistics company GoJavas in the first three months of the year.
FreeCharge, a rival of PayTM, has an estimated 10 million users on its platform, all of which are potential customers for Snapdeal.