May 11, 2016: Snapdeal, an online marketplace is in talks with multiple investors including Chinese firms and sovereign funds to raise money for FreeCharge, seeking to bulk up its digital payments platform before pitting it against market leader Paytm.
Operating for Snapdeal, Jasper Infotech is positioning FreeCharge as a cornerstone of its business as it builds a comprehensive online ecosystem of goods and services similar to that created by Alibaba Group, a Chinese ecommerce giant. The strategy, it expects, will make the electronic marketplace stand out from its closest rivals Flipkart and Amazon.
“We are getting a lot of interest from sovereign funds and some Chinese investors,” Snapdeal CEO Kunal Bahl told ET. “Chinese investors have seen the Alipay story.”
“They have seen that Alipay has be- Q&A en successful because it is attached to a large commerce platform,” said Bal.
According to reports, Snapdeal, which is backed by Japan’s SoftBank and China’s Foxconn, was in talks with existing and new investors to raise about $300 million (Rs 2,000 crore) to strengthen FreeCharge.
Bahl declined to disclose the valuation he is seeking for FreeCharge or the status of the fundraising. Jasper Infotech acquired FreeCharge in April last year for an estimated $400-450 million in cash and stock.
Payment for purchases of goods on Snapdeal as well as a range of services such as travel-booking and food-ordering can be done through FreeCharge that the online marketplace recently included on its mobile application through tieups with other firms.
“I have told investors, ‘If you want to come into our crown jewel, it is going to be at a price’,” Bahl said. “If you are not willing to pay that price today, no problem. Let’s wait for three to six months and let (Free-Charge) continue to execute. Till then, we will finance it.”
Snapdeal in February brought on board technology-focused venture capital firm Iron Pillar, which is an adviser to Singapore-based investment firm Brother Fortune Apparel Pte Ltd that represents several very wealthy Chinese individuals.