Deal fuels Snapdeal turnaround hopes
FREECHARGE SALE TO AXIS BANK
Buoyed by the sale of FreeCharge to Axis Bank, Snapdeal co-founder Kunal Bahl has said the deal “provides us the necessary boost in resources to continue our journey towards building an e-commerce platform”.
Bahl's comments come in the midst of reports that the Snapdeal board is leaning towards selling the firm to Flipkart.
Axis Bank on Thursday announced it had bought the mobile payments wallet provider from Snapdeal for ~385 crore ($60 million).
In an email to FreeCharge employees, Bahl said the new management intended to retain the whole staff and invest in the brand to leverage the “world-class technology platform to the fullest”.
He said the transaction with Axis Bank was “a great outcome” for Snapdeal.
“… With the massive revolution happening in our country in the realms of very cost effective data, affordable smartphones, a unified GST tax regime, better infrastructure and rising income levels, there is no better time to be in this business. We have an opportunity of a lifetime here, and we must seize it,” Bahl said in the mail. Bahl and co-founder Rohit Bansal have for long been trying to convince the Snapdeal board to go for their “Plan B”, which is about trimming the company further and finally heading for an IPO.
Talks with Flipkart to buy Snapdeal have been going on for the past five months. In another mail to employees, the current CEO of the FreeCharge, Jason Kothari, wrote that the mobile wallet would continue to operate as a standalone business, and retain the ‘FreeCharge’ brand and technology. “I will continue to be engaged in the transition and post that will resume my position at Snapdeal,” Kothari said. Snapdeal had acquired FreeCharge for an estimated $400 million in 2015.