FreeCharge raises Rs 30cr from Jasper Infotech
Digital payments platform FreeCharge has raised Rs 30 crore from its existing investor Jasper Infotech, according to media reports quoting the Registrar of Companies. Jasper Infotech, which also owns e-commerce marketplace Snapdeal — which acquired FreeCharge in 2015 — had invested Rs 390 crore in the mobile wallet company earlier this year. According to the Economic Times, Jasper bought the additional shares following a board resolution on February 23.
Curiously, just a day previously, FreeCharge CEO Govind Rajan had announced his resignation from the company. Currently, Jason Kothari — former CEO at Housing and now Chief Strategy and Investment Officer at Snapdeal — is in charge of operations at FreeCharge.
Over the last few months, various reports have suggested that FreeCharge was trying to raise funding from SoftBank, Tencent, and Foxconn. Towards the end of last year, US-based Paypal was reportedly close to buying 25 percent stake in FreeCharge for $200 million. It was clear that FreeCharge was struggling for cash, and raising funding of less than $5 million — a minor amount for a company of its stature — re-establishes this.
Worried about its own cash crunch, Snapdeal was helpless when it came to funding FreeCharge. In fact, Snapdeal laid off more than half of its workforce recently, and its founders (CEO Kunal Bahl and executive chairman Rohit Bansal) took 100 percent pay cuts. It was reported just a few days ago that Snapdeal was, in fact, trying to sell FreeCharge.
This is a do-or-die phase for FreeCharge — its largest competitor Paytm recently crossed 200 million users and has even raised $200 million for its e-commerce arm Paytm Mall, thus becoming a unicorn. Fintech is, after all, no child’s play, and despite the capital dumping, startups in the domain are yet to figure out a way to make money. Now that foreign money is not flowing as easily as it did in 2014–2015, growth will take a backseat.
