Will you recharge my life? Snapdeal buys Freecharge in biggest m-commerce push

E-commerce company Snapdeal has acquired mobile recharge firm FreeCharge for an estimated $400 million, a deal that is being touted as the the largest buyout so far in the Indian start-up space. Freecharge tracks online/offline purchase behaviour of consumers, by offering them incentives and coupons to transact on its platform.The buy will boost Snapdeal’s mobile business.Already 75 percent of Snapdeal’s transactions are through mobile. Although the deal size was not revealed, media reports have estimated the deal at $400 million (Rs 2400 crore), larger than Flipkart’s $300 million acquisition of Myntra in May 2014. Snapdeal, which is backed by Japan’s SoftBank,  has about 40 million users and 100,000 merchants selling everything from mobiles to houses on its website. Kunal Bahl, co-founder & CEO of Snapdeal, said with this acquisition, Snapdeal has become India’s largest mobile commerce firm with 40 million users, the largest mobile transactions base for any company. “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,” Bahl said in a statement. And this is what he tweeted:

Freecharge competes with Paytm, and boasts of daily mobile transactions of more than 1 million. “In just over 4 years, FreeCharge has not only garnered huge amount of brand love but also made mobile recharging and bill payments a very convenient and rewarding experience for more than 20 million users. Mobile transactions on FreeCharge app have grown by 60X in 2014 driven through 10+ Million App Downloads,” said Freecharge CEO Kunal Shah in a blog post.   Terming it as a ‘Dil ka deal’, Freecharge and Snapdeal have even created a video explaining the merger.  Watch the video below:

[caption id=“attachment_2189155” align=“alignleft” width=“380”] Freecharge[/caption] FreeCharge will continue to function as an independent platform. The companies will collaborate to offer a shopping experience to customers across both platforms offering an even wider range of products and services. Snapdeal has been on an acquisition spree over the last couple of months. Just last month it announced it will invest $150 million-$200 million to strengthen its delivery network in the next financial year after the SoftBank-backed company invested in a minority stake in logistics company GoJavas. Then days later it announced that it had bought  a majority stake in digital financial-products distribution company RupeePower. The idea behind it is to  to offer loans to consumers, and it has targeted disbursements of $1 billion (about Rs 6,200 crore) over the next one year. In February it bought luxury fashion marketplace Exclusively. In December 2014, Snapdeal acquired gift recommendation portal Wishpicker.com for an undisclosed amount. It had previously acquired the Delhi-based fashion & lifestyle product discovery site Doozton, in April. In May 2013, Snapdeal bought handicraft marketplace Shopo.in and in 2012 it bought online retailer of sports and fitness equipment Esportsbuy.com. Back in 2010, the company acquired the group buying site Grabbon. In March the company even said it is open to at least five to six acquisitions this calendar year in the areas of mobile technology, big data and logistics. In an interview with Firstpost, Snapdeal co-founder and CEO Kunal Bahl made it clear that the firm wants to become the most profitable e-tailer in India. “Alibaba turned profitable in the 11th year after its inception and now generates over $5 billion in EBITDA. Given our business model is similar to Alibaba’s and has the same operating leverage as their business, we believe once our investments in technology and logistics infrastructure reach a satisfactory equilibrium, we should become the most profitable e-commerce company in India,” Bahl had said .