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Online marketplace Snapdeal has acquired mobile transaction platform FreeCharge in a cash and stock deal said to be worth around $400 million.
With this, Snapdeal has become the largest mobile commerce firm in the country, offering over 11 million products and services, including financial services, mobile recharge and utility payments. The company has a base of over 40 million users.
FreeCharge, an online platform where users can pay their mobile, DTH and utility payments across most major operators, will continue to function as an independent platform with all aspects of its shopping experience remaining unchanged. The company was founded in 2010 by Kunal Shah and Sandeep Tandon.
Kunal Bahl, co-founder and CEO of Snapdeal, said that each day 75 million mobile recharges take place in India, of which only 3 million recharges are online. “By 2019, the number of mobile recharges will go up to 1 billion a month and a lot of online recharges will be done by new mobile internet users in the country. It often ends up being their first e-commerce transaction given the ticket size, convenience and instant gratification.”
Inspired by Alibaba Bahl and Snapdeal co-founder Rohit Bansal have made no secret of the fact that they are continuing to draw inspiration from Chinese e-commerce giant, Alibaba when it comes to expanding their business.
Pointing out that 20 per cent of Alibaba Group company Tmall Global’s sales, which amount to $20 billion a year, is from mobile recharges, Bahl said that he sees online mobile recharges in India growing the same way.
Today, the combined entity of Snapdeal and FreeCharge represents over 1 million daily mobile transactions, 40 million users across both platforms on mobile and 30 million users already having Snapdeal and FreeCharge mobile apps.
Snapdeal has expanded its business 500 per cent this year over the previous year and is confident of growing at the same rate. The company raised $1 billion in fresh funding last year alone and its team size has risen to 5,000 with 200 more joining with the FreeCharge acquisition. Bahl said that he would add more people to the FreeCharge team over the next 12 months.
Recent buys Over the last six months, Snapdeal has acquired many companies. In February, it acquired Exclusively.in, an online retailer of premium luxury and fashion. Last year, the company acquired fashion discovery start-up Doozton and gift recommendation technology platform Wishpicker. More recently, Snapdeal picked up a majority stake in digital financial services platform, RupeePower.com.
Bahl and Bansal said they would continue to acquire companies that fit in with the company’s vision to become the Alibaba of India, building a strong digital e-commerce ecosystem, much like the Chinese firm’s digital ecosystem.
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