Snapdeal is moving aggressively on two specific fronts right now, Diversification and Consolidation. That has become even more evident with the online marketplace now acquiring online recharging platform FreeCharge for an undisclosed amount, in what is being pegged as the largest ever acquisition deal in India’s startup ecosystem.
Various media reports are pegging the amount in the vicinity of $400-$450 Million, however nothing official is available from either companies. This amount, if true, would surpass Flipkart’s $300 Million Myntra acquisition last year to become Indian start-up ecosystem’s most valuable deal.
Announcing the acquisition via a Facebook status update (that style is pretty much in these days), Kunal Shah, Founder at FreeCharge said,
FreeCharge has been growing at a robust pace, ever since Kunal founded the company in 2010. The startup has already raised multiple funding rounds, the most recent of them being a Series C round worth A whopping $80 Million, led by Valiant Capital
On the other hand, Snapdeal has been on an acquisition spree for quite some time now. The company earlier acquired GoJavas, a start-up specialising in providing logistical solutions, and more recently Rupee Power, a startup focusing on easing the availability of micro-financing options to SMBs and startups within India.
SnapDeal + FreeCharge = M-Commerce gets a boost
Snapdeal’s acquisition further seals up India’s internet focus – towards mobile. While e-commerce has enjoyed its fair bit of popularity on India, it still didn’t soar as high as the U.S. or Chinese markets. This can largely be attributed to a rather delayed arrival of mass e-commerce services within the country. While Flipkart taught people to shop online, similar services were already on the offering by bigger tech companies like Yahoo and Rediff.
But a failure and ignorant attitude towards spreading those services into the masses led to the Flipkart/Snapdeal-era. Then Amazon too joined the bandwagon, making India the fastest and most lucrative e-commerce market in the world.
However, such late arrivals of e-commerce and a fastened up smartphone penetration rate within the country made sure that desktop shopping was short-lived. Instead, consumers have started getting more inclined towards purchasing products through their smartphones, thus leading to a boom in m-commerce startups and acquisitions.
And considering the huge amount of market share which both Freecharge and Snapdeal enjoy in their respective domains, this could well be the formation of India’s largest M-commerce brand.
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