Digital payments player FreeCharge posts reduced loss in FY18
While Paytm and PhonePe saw their losses increase, FreeCharge managed to reduce it, though at the cost of maintaining a stagnant revenue.
Digital payments platform FreeCharge narrowed its loss by 77 percent to Rs 81 crore in the financial year 2018. The company had posted a loss of Rs 355 crore during the fiscal year 2017, documents filed by the company with Registrar of Companies (RoC) show.
However, the narrowing of loss came on the back of the company seeing its revenue from operations falling marginally by 1.7 percent to Rs 23.1 crore in FY18 from Rs 23.5 crore in FY17.
FreeCharge was founded by Kunal Shah and Sandeep Tandon in 2010 and was acquired in 2015 by Snapdeal, which was led by Kunal Bahl, for approximately $400 million (cash plus stock deal).
In July 2017, Axis Bank acquired a 100-percent stake in the company from Jasper Infotech Private Ltd, the parent of Snapdeal for a consideration of Rs 385 crore.
The RoC document stated, “FreeCharge operated a payment system for semi-closed prepaid payment instruments services in India under a Certificate of Authorisation (COA) issued by the Reserve Bank of India (PPI business). The Company issued more than 59 million e-wallets and tied-up with more than 200k+ online and offline merchants.”
While FreeCharge has been able to reduce its loss, rivals like Flipkart-owned digital payments platform PhonePe and Paytm have witnessed their losses increasing.
PhonePe incurred a loss of Rs 791 crore for the financial year 2018, compared to a loss of Rs 129 crore in the last fiscal. On the other hand, One 97 Communications Ltd, which houses the main payments business, reported an over four-fold increase in its consolidated revenue in FY18 to Rs 3,314.8 crore while incurring a loss of Rs 1,490 crore, compared to Rs 879 crore of loss in fiscal 2017.