Touted as one of the biggest acquisitions in the history of the Internet industry in India, Snapdeal today announced that it has acquired FreeCharge to build the most impactful digital commerce ecosystem in India.
The financial details of the deal were not disclosed by either company. When Kunal Bahl, Co-founder of Snapdeal, was asked about the deal structure, he said that the testament of a deal can be gauged by the way investors react to it. FreeCharge had raised $80 million earlier this year in February 2015 which took its total funding to $120 million where Snapdeal has raised almost $1.1 billion, including the massive $627 million funding round of 2014 October.
FreeCharge and Snapdeal were founded in 2010 in Mumbai and New Delhi respectively. Kunal Bahl and Kunal Shah (Co-founder FreeCharge) knew each since then and have been in discussion for some time now.
The deal will not affect the consumer immediately as both the entities continue the way they are, but brings a significant turmoil in the mobile commerce ecosystem of India. In a joint statement issued by both the companies, the co-founders said,
The companies will collaborate to offer a seamless shopping experience to customers across both the platforms offering an even wider range of products and services.
YourStory brings everything you wanted to know about the current deal:
1. With this acquisition, Snapdeal claims to be the largest mobile commerce company in India.
2. FreeCharge will continue to function as an independent platform and all aspects of FreeCharge’s shopping experience will remain intact.
3. It's a cash plus stock deal with the majority of it in stocks and only a small part in cash.
4. Integration will take almost six months.
5. The 200 employees of FreeCharge continue with the company which will now witness some aggressive hiring.
6. At the time of the deal, FreeCharge had more than $80 million in its bank accounts.
6. Snapdeal and FreeCharge combined together have a user base of over 40 million and a total of 30 million app downloads (FreeCharge 10 million) on play store.
7. Both the platforms combined together witness >1 million transactions daily.
8. Snapdeal now has seven major subsidiaries - Snapdeal, Exclusively.in, RupeePower, TV-Shop, Snapdeal Plus, Gojavas and FreeCharge.
9. While Snapdeal receives over 70% of its orders from tier-2 cities and beyond, FreeCharge receives less than 30% orders from these geographies.
10. This could be one of the biggest M&A in the Indian internet ecosystem.
This deal is not targeted at raising funds or making an immediate exit. We believe that the combined partnership along with our independent operations in this deal will give more firepower to the company.
Watch Kunal Shah explaining the laws of mobile growth below: