According to a media report, Snapdeal owned digital wallet Freecharge is currently up for grabs for as low as $150-200 million.
The report, published in ET, also claims that Alibaba-owned Paytm has expressed its interest in the SoftBank-backed digital wallet and is currently one of the top contenders for the same. It also quotes an anonymous source saying that the Japan-based investor SoftBank’s current plan of action is to first iron out all the shareholder discord at Snapdeal and then get a toehold in Flipkart, and after all this is accomplished, it will look towards finalising the sale of the digital wallet.
The same report also states that the Japanese investor is also re-working on its plans for selling Snapdeal altogether, and a decision on the same is likely to be taken in the next 10-14 days.
According to some sources, a discussion for the sale is most likely to take place in Tuesday’s board meeting of Snapdeal, where Softbank has a significant board representation and stake, but the Japanese investor is trying its best to get support of other directors.
According to speculations in the market, Snapdeal, which is currently the country’s third-largest online shopping platform could be sold to the its rival Flipkart, which is a market leader in sector. What’s interesting to note is that Paytm’s name has also emerged on the potential buyer list. Paytm is backed by China-based Alibaba, which is also a shareholder in Snapdeal.
While Softbank and Snapdeal have decided to remain tight lipped on the matter, the deal, if finalised could mark the biggest acquisition in the Indian e-commerce space till date and change the landscape of the sector for years to come.
The board of Jasper Infotech, which operators Snapdeal, reportedly met yesterday in order to dwell on the contours of a possible deal.
According to sources, Snapdeal’s major problem is its valuation, as Nexus Venture Partners and Kalaari Capital aren’t happy with the valuation given by SoftBank, Snapdeal’s largest shareholder.
Over the last few months, the cash-trapped ecommerce platform has been having serious cash troubles and has even significantly trimmed down its team and put a halt on almost all its non-core businesses
In its last funding round in February last year, Snapdeal was valued at $6.5 billion. But, experts claim that the firm’s valuation has shrunken since then and the potential deal is most likely to happen at a discounted rate.