Online payment giant PayPal is in talks to buy a 25 per cent stake in Freecharge for about $200 million.
The report said PayPal’s initial offer was for a 51% stake in FreeCharge. But Japan’s SoftBank Group Corp, the largest shareholder in Snapdeal, is not keen to divest a majority stake and may sell 20-25% in FreeCharge.
Founded in 2010 by Kunal Shah and Sandeep Tandon, FreeCharge is a payment app based in Mumbai. It allows for online facility to recharge any prepaid mobile phone, postpaid mobile, DTH & data cards in India.
The move could heat up competition in the online payments industry in India that has received a boost in recent weeks with the government invalidating old high-denomination currency notes and driving the move towards a cashless economy.
Paypal has also made some aggressive moves in India recently. It is suing Alibaba-backed digital wallet company Paytm for copyright infringement, saying it “slavishly adopted” the two-tone blue colour scheme of PayPal in its entirety in its logo.
While PayPal has hired Goldman Sachs as an advisor, Jasper Infotech is being counselled by Deutsche Bank. Snapdeal’s head of mergers and acquisitions Abhishek Kumar and Jasper Infotech Founder Kunal Bahl are leading the deal. The possible sale will also be subject to approval by PayPal’s board. All parties involved have either refused to comment or have denied any potential deal.