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MobiKwik-Freecharge deal to herald new era for wallets

Once India's second largest wallet firm, Freecharge is valued at 10% of what Snapdeal paid for it

Karan Choudhury  |  New Delhi 

Freecharge
Govind Rajan, former CEO of FreeCharge. Photo: Freecharge

If last year was marked by shutdowns, losses and layoffs in the sector, this could well be the year when others too were caught in the slowdown.

After online marketplaces, it now seems to be the turn of financial technology start-ups to either shut shop or sell themselves.



One of the biggest architects of the consolidation drive under way is Japanese conglomerate It is orchestrating mergers not just in the space, but also for digital wallets.

As it tries to convince to give its nod to the Snapdeal-merger, is on the side fixing a deal with to sell Freecharge, the digital wallet acquired by in 2015.

Freecharge, which till last year was touted as the second largest wallet player in India after Paytm, today is valued at one-tenth of the price paid for it, which was roughly $400 million.

has been on the block for some time. According to informed sources, Jason Kothari, who was recently appointed as chief executive officer of Freecharge, is in talks with investors from the US and China in an effort to sell it. was initially interested in making a sizeable investment in Freecharge, but the deal could not be closed.

Kothari was brought into real estate portal by Softbank, which held a stake in the firm, after the unceremonious exit of CEO After Housing was sold to another portal, PropTiger, Kothari joined in January this year as chief strategy and investment officer. In March, he was also given charge of as its CEO and board member.

Freecharge, according to sources, has been in talks with Paytm, and even for a possible stake sale. The deal with MobiKwik, if it goes through, along with Flipkart’s acquisition of Snapdeal, will help exit fully.

In the last six months, has been working towards the biggest consolidation in the Indian  segment and is trying to hedge its bets with plans to buy stakes in both Tiger Global-backed as well as Alibaba’s lead investment in India, Paytm.

Experts believe at present the main concern of the Japanese investor is to cut its losses on investments in The company has invested close to $900 million in the start-up.

“By hedging its bets in Paytm and Flipkart, is trying to ensure that it is able to exit from one of these investments at a later stage at a premium. Since Paytm is backed by Alibaba, which is Softbank’s crown jewel, it is more likely to exit when it goes in for an IPO,” said an analyst with an international consultancy firm.

mobikiwik, paytm, online, payment, digital, pay
Mobikwik, on the other hand, is set to gain from the merger with The deal will lend it scale and help it to become a bigger player in the space after inheriting Freecharge’s merchants, which include Amul, IRCTC, Uber, Meru Cabs, Big Bazaar, OYO Rooms, BookMyShow, Big Basket, and a host of other offline players.

will also gain Freecharge’s customer base to become the second largest player in the market after Paytm with 75-80 million users. At present, has around 50 million users.

The merger will make more lucrative for investors. has for some time been trying to raise funds. It has been on a major expansion drive and has opened 13 new offices, recruiting over 1,000 employees.

The company is keen to project itself as a serious entity in the financial technology space to investors. Co-founder and founder-CEO have been meeting investors in the US and elsewhere to raise new rounds of funding.

It recently said that it planned to invest Rs 300 crore in office expansion, technology and marketing. It has also set a goal to increase its user base to 150 million within a year. This increase will push its annual gross merchandise value to $10 billion from the current $2 billion.

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MobiKwik-Freecharge deal to herald new era for wallets

Once India's second largest wallet firm, Freecharge is valued at 10% of what Snapdeal paid for it

Once India's second largest wallet firm, Freecharge is valued at 10% of what Snapdeal paid for it If last year was marked by shutdowns, losses and layoffs in the sector, this could well be the year when others too were caught in the slowdown.

After online marketplaces, it now seems to be the turn of financial technology start-ups to either shut shop or sell themselves.

One of the biggest architects of the consolidation drive under way is Japanese conglomerate It is orchestrating mergers not just in the space, but also for digital wallets.

As it tries to convince to give its nod to the Snapdeal-merger, is on the side fixing a deal with to sell Freecharge, the digital wallet acquired by in 2015.

Freecharge, which till last year was touted as the second largest wallet player in India after Paytm, today is valued at one-tenth of the price paid for it, which was roughly $400 million.

has been on the block for some time. According to informed sources, Jason Kothari, who was recently appointed as chief executive officer of Freecharge, is in talks with investors from the US and China in an effort to sell it. was initially interested in making a sizeable investment in Freecharge, but the deal could not be closed.

Kothari was brought into real estate portal by Softbank, which held a stake in the firm, after the unceremonious exit of CEO After Housing was sold to another portal, PropTiger, Kothari joined in January this year as chief strategy and investment officer. In March, he was also given charge of as its CEO and board member.

Freecharge, according to sources, has been in talks with Paytm, and even for a possible stake sale. The deal with MobiKwik, if it goes through, along with Flipkart’s acquisition of Snapdeal, will help exit fully.

In the last six months, has been working towards the biggest consolidation in the Indian  segment and is trying to hedge its bets with plans to buy stakes in both Tiger Global-backed as well as Alibaba’s lead investment in India, Paytm.

Experts believe at present the main concern of the Japanese investor is to cut its losses on investments in The company has invested close to $900 million in the start-up.

“By hedging its bets in Paytm and Flipkart, is trying to ensure that it is able to exit from one of these investments at a later stage at a premium. Since Paytm is backed by Alibaba, which is Softbank’s crown jewel, it is more likely to exit when it goes in for an IPO,” said an analyst with an international consultancy firm.

mobikiwik, paytm, online, payment, digital, pay
Mobikwik, on the other hand, is set to gain from the merger with The deal will lend it scale and help it to become a bigger player in the space after inheriting Freecharge’s merchants, which include Amul, IRCTC, Uber, Meru Cabs, Big Bazaar, OYO Rooms, BookMyShow, Big Basket, and a host of other offline players.

will also gain Freecharge’s customer base to become the second largest player in the market after Paytm with 75-80 million users. At present, has around 50 million users.

The merger will make more lucrative for investors. has for some time been trying to raise funds. It has been on a major expansion drive and has opened 13 new offices, recruiting over 1,000 employees.

The company is keen to project itself as a serious entity in the financial technology space to investors. Co-founder and founder-CEO have been meeting investors in the US and elsewhere to raise new rounds of funding.

It recently said that it planned to invest Rs 300 crore in office expansion, technology and marketing. It has also set a goal to increase its user base to 150 million within a year. This increase will push its annual gross merchandise value to $10 billion from the current $2 billion.

graph

image
Business Standard
177 22

MobiKwik-Freecharge deal to herald new era for wallets

Once India's second largest wallet firm, Freecharge is valued at 10% of what Snapdeal paid for it

If last year was marked by shutdowns, losses and layoffs in the sector, this could well be the year when others too were caught in the slowdown.

After online marketplaces, it now seems to be the turn of financial technology start-ups to either shut shop or sell themselves.

One of the biggest architects of the consolidation drive under way is Japanese conglomerate It is orchestrating mergers not just in the space, but also for digital wallets.

As it tries to convince to give its nod to the Snapdeal-merger, is on the side fixing a deal with to sell Freecharge, the digital wallet acquired by in 2015.

Freecharge, which till last year was touted as the second largest wallet player in India after Paytm, today is valued at one-tenth of the price paid for it, which was roughly $400 million.

has been on the block for some time. According to informed sources, Jason Kothari, who was recently appointed as chief executive officer of Freecharge, is in talks with investors from the US and China in an effort to sell it. was initially interested in making a sizeable investment in Freecharge, but the deal could not be closed.

Kothari was brought into real estate portal by Softbank, which held a stake in the firm, after the unceremonious exit of CEO After Housing was sold to another portal, PropTiger, Kothari joined in January this year as chief strategy and investment officer. In March, he was also given charge of as its CEO and board member.

Freecharge, according to sources, has been in talks with Paytm, and even for a possible stake sale. The deal with MobiKwik, if it goes through, along with Flipkart’s acquisition of Snapdeal, will help exit fully.

In the last six months, has been working towards the biggest consolidation in the Indian  segment and is trying to hedge its bets with plans to buy stakes in both Tiger Global-backed as well as Alibaba’s lead investment in India, Paytm.

Experts believe at present the main concern of the Japanese investor is to cut its losses on investments in The company has invested close to $900 million in the start-up.

“By hedging its bets in Paytm and Flipkart, is trying to ensure that it is able to exit from one of these investments at a later stage at a premium. Since Paytm is backed by Alibaba, which is Softbank’s crown jewel, it is more likely to exit when it goes in for an IPO,” said an analyst with an international consultancy firm.

mobikiwik, paytm, online, payment, digital, pay
Mobikwik, on the other hand, is set to gain from the merger with The deal will lend it scale and help it to become a bigger player in the space after inheriting Freecharge’s merchants, which include Amul, IRCTC, Uber, Meru Cabs, Big Bazaar, OYO Rooms, BookMyShow, Big Basket, and a host of other offline players.

will also gain Freecharge’s customer base to become the second largest player in the market after Paytm with 75-80 million users. At present, has around 50 million users.

The merger will make more lucrative for investors. has for some time been trying to raise funds. It has been on a major expansion drive and has opened 13 new offices, recruiting over 1,000 employees.

The company is keen to project itself as a serious entity in the financial technology space to investors. Co-founder and founder-CEO have been meeting investors in the US and elsewhere to raise new rounds of funding.

It recently said that it planned to invest Rs 300 crore in office expansion, technology and marketing. It has also set a goal to increase its user base to 150 million within a year. This increase will push its annual gross merchandise value to $10 billion from the current $2 billion.

graph

image
Business Standard
177 22