Snapdeal has appointed former online real estate portal Housing.com executive Jason Kothari to the position of Chief Executive Officer of its digital payments subsidiary Freecharge, while also committing to invest a further $20 million into the firm.
Kothari's appointment to the role comes a month after former Freecharge CEO Govind Rajan quit the company and amid growing concerns of Freecharge losing out to larger rival Paytm in India's fast growing digital payments space.
"Jason is a strong, strategic and versatile business leader & entrepreneur who has already been the CEO of two successful companies. We are delighted to announce his leadership role at FreeCharge," said Kunal Bahl, co-founder and CEO of Snapdeal, in a statement.
Snapdeal hired Kothari as its Chief Strategy Officer in January, soon after Housing.com was sold to NewsCorp-backed rival PropTiger. The move was seen as an exercise by investor Softbank exerting more control over Snapdeal, which has suffered markdowns in its valuation due to increased competition from Amazon.
Kothari will continue to hold his position as Chief Strategy and Investment Officer at Snapdeal despite his appointment as CEO of Freecharge. His reputation as a turnaround man, having successfully driven the acquisition of two struggling companies Housing.com and Valiant Entertainment, is being seen as the biggest reason for his appointment.
Freecharge has been struggling to raise external funding from investors such as PayPal in the past few months, after talks fell out over valuation disagreements. In the year that ended March 2016, the firm posted a loss of Rs 235 crore on a revenue of just Rs 35 crore.
"The accumulated loss exceeds the paid-up share capital and the net worth of the company has completely eroded. The company's ability to continue as going concern is dependent on success of operations and its ability to arrange funding for its business operations," wrote FreeCharge's auditors in its FY16 regulatory filings with the Registrar of Companies.
Snapdeal's investment of $20 million in Freecharge will ensure the company has enough working capital in the near future. The company however hasn't shared any details of the investment, simply saying it will "accelerate innovations and growth".
Kothari in a statement said that he expected that Freecharge would "continue to play a key role" in India's digital payments revolution with the industry slated to hit $1 trillion by 2025.