By Dhanya Ann Thoppil And Kenan Machado
India's Snapdeal.com is offering to buy mobile-payments company
FreeCharge for more than $400 million, people familiar with the
discussions said, in a deal aimed at helping Snapdeal get an edge
in the battle for the small but fast-growing Indian e-commerce
market.
SoftBank Corp.-backed Snapdeal is in advanced negotiations with
FreeCharge for the acquisition, which would be 60% equity and 40%
cash, said the sources. The deal could be completed in around a
month, one of the people said.
Snapdeal, which is controlled by Jasper Infotech Pvt., is one of
the biggest online marketplaces in India. It says it has about 40
million users and 100,000 merchants selling everything from
cellphones to cars.
Mumbai-based FreeCharge, which is controlled by Accelyst
Solutions Pvt., is backed by U.S.-based venture firm Sequoia
Capital, Belgium's Sofina SA, Tybourne Capital Management and
others.
Founded in 2010, FreeCharge says it has more than 20 million
users who use the site to top up their mobile-phone accounts and
pay utility bills and other bills.
Roughly half of those customers have their credit-card details
stored on the site which makes them attractive as potential
customers for any online retailer. Snapdeal is looking to use the
company to build its customer base as well as get the technology it
needs to better serve people in India through their smartphones,
said one person familiar with its thinking.
Snapdeal and other online marketplaces such as Flipkart Internet
Pvt. and the Indian arm of Amazon.com Inc. have all placed their
bets on a sharp increase in online shopping as more Indians get
online using inexpensive smartphones.
The acquisition plans come at a time when Snapdeal is talking to
more investors to raise funds. The company is negotiating with
China's Alibaba Group Holding for potential investment, people
familiar with the discussions told The Wall Street Journal last
week.
Last year, Snapdeal raised about $1 billion from SoftBank, eBay
Inc. and others.
Write to Dhanya Ann Thoppil at dhanya.thoppil@wsj.com and Kenan
Machado at kenan.machado@wsj.com
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