What already turned out to be an intelligent decision by Snapdeal, might just get even brighter. Bought by India’s second biggest ecommerce brand for a whopping $450 Million, Freecharge might seen a special fundraise for itself, in the vicinity of $300 Million, report Economic Times.
It is believed that the fund raised will be used to strengthen FreeCharge and further increase Snapdeal’s ability to offer a gamut of goods and services to customers through the digital payments platform already available but lesser used services.
As per the report, there will be no secondary components for the new funding round and thus, the existing investors in the company will continue to hold Freecharge stock which they got after its acquisition by Snapdeal.
This report though, comes in less than three months of Snapdeal’s big Alibaba fundraise. Earlier, in August, Snapdeal had raised $500 million from Alibaba Group, Foxconn and SoftBank. Snapdeal acquired FreeCharge earlier this year for about $450 million, the biggest buyout in the Indian startup space till date.
The funding will help FreeCharge compete against its biggest rival – PayTM, which recently raised $680 million from Alibaba. PayTM is claimed to the largest mobile commerce platform in India. It recently announced its plans to start a new payment business, after the company’s founder – Vijay Shekhar Sharma received payment bank license from RBI.
However, since payTM has ventured aggressively into e-commerce as well, it will only be company’s digital payments solution which Freecharge will be up against.
Recently, FreeCharge had also launched a digital wallet service called FreeCharge Wallet in partnership with Yes Bank. Within a week of its launch, the company announced that the service had crossed 1 million subscribers. It had then announced a marketing budget to the north of $100 Million for its digital wallet’s promotion.
FreeCharge and Snapdeal combined, receive around 8.2 million unique visitors daily and has 20 million stored cards on their platform. The growth merchandise value (GMV) is also over $4 billion for the two.
Snapdeal aims to create a complete ecosystem of goods and services to stand out from its rivals – Flipkart and Amazon, a model similar to Alibaba. Earlier, the company’s founder stated that he expects his company to become the country’s largest ecommerce provider, toppling Flipkart, by the end of the current financial year in March. As of date, the company has raised $1.9 billion in funding.