Paytm in talks to acquire Snapdeal’s payment wallet business Freecharge
âAlibaba-backed One97 Communications, which runs popular digital payments platform Paytm, is believed to have initiated discussions with Japser Infotech which runs the e-commerce platform Snapdeal to acquire the latter’s payment wallet business Freecharge, reports said citing sources privy to the development.
According to Financial Express, Jasper is understood to have received a definitive agreement from One97 Communications to acquire the former’s payment wallet business Freecharge. The size of the deal is said to be valued at $50 million (around Rs 322 crore), it added.
“At the same time, Snapdeal is reportedly in talks with other parties including public sector banks and other companies, including Times Internet, as it looks to strike a better deal,” the report quoted a source as saying.
Snapdeal, which has been on a lookout for a buyer for its payments platform, had first approached PayPal in this regard but the talks did not go through. It was then that it approached Paytm in February for the sale, reports said.
However, these discussions too ended inconclusively and the company has since approached other players including MobiKwik, Bank of Baroda, amongst others.
“Freecharge is currently engaged with multiple interested parties and expects to conclude a deal in the near future,” a Freecharge spokesperson said.
Snapdeal acquired FreeCharge in 2015 for an estimated $400 million (Rs 2,400 crore) in a stock-cash deal.
Paytm, which received a big boost following the government’s cashless push after demonetization, received a fresh boost when SoftBank Group invested $1.4 billion in Paytm in lieu of 20 per cent stake in the company last month. The funding raised Paytm’s valuation to $7 billion post-money.
Softbank had reported losses to the tune of $1.4 billion on investments in e-commerce player Snapdeal and taxi aggregator Ola in the period to March 2017. The losses come in contrast to a gain of $1 billion in 2015-2016.
Freecharge reported a loss of Rs 235 crore on a revenue of Rs 36 crore for the year ended March 2016. The company in FY15 posted losses of Rs 269 crore on the back of revenues of Rs 35 crore.