Amid job cuts, Freecharge CEO quits as Snapdeal struggles with funding

Snapdeal has been struggling to raise fresh funds to sustain the business in the long run

Govind Rajan, chief executive of payments Wallet Freecharge has quit the company as its parent Snapdeal is struggling to shed the business within two years of its acquisition, at a time when India’s digital payments ecosystem is growing.

“It has been a unique privilege to helm FreeCharge in these exciting times of rapid growth and user-focused innovation. I am confident that FreeCharge will achieve still greater heights under its incredibly talented team and I look forward to facilitating the transition over the next few weeks,” said Rajan.

Snapdeal, which acquired Freecharge for around $400 million in cash and stock deal in 2015, has been struggling to raise fresh funds to sustain the business in the long run. Lack of interest among investors at a high valuation had forced Snapdeal to put the payments wallet business on dock.

Rajan, a former head of Airtel’s Payments bank, has changed Freecharge, an online coupons platform to bring in more partners and users as a payment platform. He also partnered with MasterCard to offer a virtual prepaid debit card to users as the company played catch up to market leader Paytm in the business.

"Govind has brought incredible energy and focus in growing FreeCharge. The pace of progress will continue with the strong team that he has built. I am sure he will bring the same level of passion and resolve to whatever he chooses next. I wish him the very best,” said Kunal Bahl, CEO and co-founder of Snapdeal. 

Rajan confirmed his exit and Jason Kothari, head of strategy at Snapdeal will lead the company to its eventual exit.

India’s payment bank ecosystem is undergoing a disruption after the introduction of unified payments interface (UPI) that allows transfer of money between two individuals or a vendor on a mobile app. Since last November, when India began its demonetisation exercise to turn the country into a less cash economy, the government has also pushed adoption of UPI mandating all public sector banks to use the platform.

Besides this, the launch of payments bank by Airtel and the soon to be launched Paytm payments bank would mean that wallets would lose its relevance.