According to sources, Japan’s SoftBank Corp, the largest shareholder in Snapdeal, is in talks to invest in the digital payments unit of the online marketplace – FreeCharge. The round, which also expects to see participation from other onvestors, will help Freecharge grab Rs 1,000 crore-Rs 1,350 crore. This would translate into Freecharge being valued at USD 700 million-USD 1 billion, making it one of the most richly-valued companies in the Indian startup ecosystem. FreeCharge, currently competes with Alibaba backed Paytm.
Sources say that the Freecharge founders have been eyeing a valuation of between $900 million-$1 billion. Also, that the potential investors could buy stakes of 15%-25% in Freecharge Payment Technologies Private Limited, which operates Freecharge. Besides online payments of utility bills and payments for purchases on Snapdeal, FreeCharge has also been aggressively pushing into offline payments at restaurants and retail outlets.
Earlier in the month of May, FreeCharge CEO Govind Rajan had said that the company was aiming for 7 million daily transactions worth Rs 20,000 crore in 2016-17. On its Competitor front, in August, Paytm, raised between USD 50-70 million from Taiwan-based semiconductor maker MediaTek at a $4.8-billion valuation. This was followed by South Africa-headquartered global payments solutions and transaction processing company Net1 UEPS Technologies Inc making a $40 million strategic investment in Delhi-based digital wallet player MobiKwik. Then in September in one of the largest M&A’s in the Indian startup world, South African media giant Naspers-owned payments firm PayU acquired Mumbai-based Citrus for Rs 865 Cr.
This deal post Nikesh Arora’s exit from the company who was considered as the prime mover behind the Japanese investor’s large bets in the country’s startup ecosystem, will surely be useful to assuage concerns about the Soft-Bank’s future bets in India.