Snapdeal acquires FreeCharge

As part of its effort to become an ecosystem in the eCommerce space, Snapdeal on Wednesday acquired mobile transactions platform FreeCharge, making it one of the largest acquisitions in the Indian digital commerce industry.

Interacting with Deccan Herald, Jasper Infotech-owned Snapdeal CEO and co-founder Kunal Bahl said that with the acquisition, the portal becomes the largest mobile commerce company in India.

“The age of monolithic eCommerce platform is over, and it is now time to build an impactful digital commerce ecosystem in India that is multidimensional and inclusive. With this acquisition, Snapdeal can offer the widest range of products and services, including financial services and mobile recharge, with an exponentially growing user-base of over 40 million,” he said.

When asked about the deal size, Bahl did not disclose details, but said it is a cash and stock deal, giving primacy to the latter. “Even though it is an acquisition, we want to keep FreeCharge as a separate entity and their founders will be given full freedom to handle the company’s matters,” he said.

Bahl said Snapdeal has about 5,000 employees and FreeCharge about 200. “It is not a VC-led acquisition and here, we find right synergy among its founders. We are going to grow as a team significantly over the next one year,” he said.

Besides the $627 million funding from Japan’s SoftBank last year, the firm made headlines with the funding from Tata Group Chairman Emeritus Ratan Tata. The company also received investment from eBay, Tybourne, Myriad, Blackrock and Temasek.

When asked about the other acquisition strategy, he said the opportunities are lying ahead as the company is evolving itself to be a platform in a country where only 10 per cent market opportunity is tapped.

“We are finding a lot of traction in the hospitality segment, as individuals and families, nowadays, have an inclination towards travelling. We are scouting for other segments as well,” he said.

With an eye on the growing financial market, Snapdeal picked up a majority stake in digital financial products platform RupeePower. Recently, it reportedly acquired a stake in logistics firm GoJavas for an estimated Rs 150-200 crore.

Bahl said the eCommerce ecosystem in the country is different from that of the US or China. “We have a unique scenario where the mobile penetration and internet access are bringing dramatic changes on the eCommerce landscape. We haven’t witnessed the transition from desktop to laptop and mobile phones scenario,” he said.

Snapdeal expects that Accelyst Solutions, which runs rewards and coupons site FreeCharge.in, will help penetrate the India’s tier -II and tier-III cities with its growing 3G and 4G networks.

Snapdeal, which started its operation in 2010 as a luxury model, has the widest assortment of 11 million products across 500 categories with millions of users and one lakh sellers under its kitty.