Snapdeal on 8 April 2015 acquired mobile recharge service FreeCharge in a cash and stock deal. With this acquisition, Snapdeal became the largest mobile commerce company in India.
The terms of the deal were not disclosed but as per estimates the deal is worth 450 million US dollars. The value of the deal is much higher than Flipkart Ltd’s 330 million US dollars-plus acquisition of online fashion retailer Myntra in May 2014.
As per the deal, Freecharge will continue to work as an independent platform and will offer many more digital goods in future. Also, most of Freecharge’s institutional investor would get Snapdeal stock.
The acquisition of FreeCharge, which boasts of 20 million users, also makes Snapdeal the company with the highest daily transactions and the highest user base.
Further the acquisition means that, Snapdeal and FreeCharge will together generate more than 1 million daily transactions and have 40 million users on the mobile.
Over the past six months, Snapdeal has so far bought four companies. These include amongst other software provider Unicommerce, logistics service company GoJavas and luxury fashion marketplace Exclusively. Snapdeal is run by Jasper Infotech Pvt. Ltd.
Mobile commerce is booming in the country and the number of mobile Internet users is expected to increase to 480 million by 2017, according to a joint report by Google and AT Kearney.
Freecharge, which competes with Paytm, was launched in 2010 by Kunal Shah.