India's leading online marketplace Snapdeal on Wednesday announced acquiring mobile transactions platform FreeCharge in a cash-cum-stock deal for an undisclosed amount to become an m-commerce firm.
Though both the firms declined to share details of the deal, Snapdeal co-founder and chief executive Kunal Bahl told reporters here that most of the transaction took place in cash.
"As private entities, we are not disclosing the cost of acquisition though most of it is transacted in cash with the remaining in stock options," Kunal said.
The five-year-old New Delhi-based Snapdeal raised $1 billion (Rs.6,226 crore) in six rounds of funding since 2011 from marquee investors such as SoftBank, BlackRock, Temasek, eBay, Premji Invest, Intel Capital, Bessemer Venture Partners and individuals like Ratan Tata of the Tata group.
FreeCharge, where users pay their mobile, DTH (direct-to-home) and utility payments through its m-commerce platform, raised $120 million (Rs.747 crore) from institutional investors like Sequoia Capital, Ru Net, Sofina, Valian Capital and Tyborne over the last four years.
"Post-acquisition, Free-Charge will be our subsidiary with its co-founder and chief executive Kunal Shah as head of its operations. Its 200-member team will also become part of Snapdeal," Bahl said.
With about 5,000 employees across the country, Snapdeal offers online shopping experience to millions of buyers for sourcing 11 million products in 500 categories from 100,000 sellers and get them delivered in over 5,000 cities and towns across the country.
"We have seen a phenomenal growth in the previous fiscal (2013-14) with about 600 percent growth in 12 months, which made us the fastest growing e-commerce firm in the country," Bahl asserted.
The acquisition, touted to be one of the biggest deals in the e-commerce space, will make Snapdeal the largest mobile commerce firm offering a range of products and services, including financial services, mobile re-charge and utility payments to about 40 million customers nationwide.
"The age of monolithic e-commerce platforms is over. It's time to build an impacting digital commerce ecosystem in India, which is multi-dimensional and inclusive," Bahl pointed out.
Snapdeal's other platforms through acquisition are the Bengaluru-based group buying site Grabbon.com; esportsbuy.com, an online sports goods retailer; Shopo.in, an online marketplace for Indian handcraft products; Exclusively.in, a luxury fashion products discover site; Smartprix.com, a product comparison website and Wishpicker.com, a gifting recommendation site.
"We are building an ecosystem to power billions of digital commerce transactions across the country," Bahl added.
Of the 75 million mobile recharges that take place in India daily, around three million of them are done online through m-commerce platform like FreeCharge, which offers a convenient and efficient solution to users for paying utility bills.
"Being ahead of the curve, 85 percent of our transactions originate from mobile and have a high repeat customer behaviour," FreeCharge co-founder Kunal Shah noted.