By The deal Street Asia
With the on-going sale talks at Indian e-commerce firm Snapdeal continue to hog headlines, Japanese investor SoftBank is now in discussions to sell Freecharge, the mobile wallet platform owned by online retailer, separately at half the price for around $150-200 million, according to a Times of India report quoting sources. The news comes in shortly after Snapdeal, run by Jasper Infotech Pvt. Ltd, named Jason Kothari as the chief executive officer (CEO) of Freecharge and committed to invest $20 million in the payments services arm. Snapdeal acquired Freecharge two years ago at avaluation of around $450 million.
Founded by Kunal Shah and Sandeep Tandon in 2010, Freecharge is one of leading wallet firms along with Mobikwik and Alibaba-owned Paytm, which is one of the frontrunners to acquire the company. However, sources quoted in the report said, SoftBank’s priority at the moment is to sort out the financial and shareholder issues at Snapdeal, after which it will finalise the sale of Freecharge.
Softbank has reportedly been at loggerheads with the other investors at cash-crunched Snapdeal over future plans for the e-commerce firm that has been trying to curb its financial bleeding by exiting non-core operations and cutting expenses including downsizing staff. According to the news report, Softbank, the largest shareholder in Snapdeal, approached Vijay Shekhar Sharma-led Paytm a few months back seeking a valuation of at least $500 million for Freecharge. “A lot has changed with both Snapdeal and Freecharge in the last quarter.
Paytm is interested in Freecharge but only if the math is reworked. It also wants exclusive rights along with the deal to become the sole payments platform for Flipkart and Snapdeal,” a source told Times of India.
It was earlier reported that global payments platform PayPal Holdings Inc was close to acquiring a significant minority stake Freecharge. The deal was reportedly pegged at around $200 million for a 25 per cent stake.
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