Analyzing the Snapdeal-FreeCharge acquisition

NEW DELHI, INDIA: Online marketplace Snapdeal has acquired mobile transactions platform FreeCharge for an undisclosed amount. This is arguably the one of the biggest acquisitions in the history of the internet industry in India.

Snapdeal and FreeCharge combined have a user base of over 40 million.  The deal is a cash plus stock deal with the majority of it in stocks and only a small part in cash. Both the companies will continue to function independently. Also, the integration will take almost six months.

What does it mean for Freecharge?

FreeCharge will run as an independent platform and all aspects of FreeCharge’s shopping experience will remain intact, the company said in its statement.  Also, Freecharge’s team of 200 professionals will retain their jobs as it is.

“FreeCharge is at the forefront of the mobile commerce revolution which is taking place in India right now. We have been ahead of the curve and as a result, 85% of our transactions originate from mobile, these transactions have very high repeat customer behavior.  FreeCharge’s success was enabled by a team of 200 extremely talented professionals” said Kunal Shah, Co-Founder & CEO, FreeCharge.

At FreeCharge, users can pay their mobile, DTH and utility payments across most major operators. Every day 75 million mobile recharges are done in India by a section of India’s 800 million mobile phone subscribers, out of which currently only 3 million recharges are done online.

What does it mean for Snapdeal?

Jasper Infotech Pvt Ltd-run Snapdeal had closed a total of around $1 billionof funding last year. With Freecharge’s acquisition, Snapdeal becomes the largest mobile commerce company in India offering the widest range of products and services, including financial services, mobile recharge and utility payments with an exponentially growing user base of over 40 million.

“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. We are thrilled to have the very talented and supercharged team of FreeCharge, under Kunal Shah’s leadership, working as one family, towards creating life changing experiences for buyers and sellers in our country” said Kunal Bahl, Co-Founder & CEO, Snapdeal.

Post Freecharge acquisition, Snapdeal now has seven major subsidiaries, which are— Snapdeal, Exclusively.in, RupeePower, TV-Shop, Snapdeal Plus, Gojavas and FreeCharge.