Softbank Group Corp powered snapdeal was on the verge of bankruptcy where the free charge deal helped them to save thier company. Flipkart being the biggest Indian eCommerce wanted to buy snapdeal but the deal made by Kunal Bahal (CEO of Snapdeal) helped his company from being sold to flipkart.
Thee sale of Freecharge to Axis Bank For Rupees 385 Crores which banked their deposits to save his company. Here Freecharge was first bought by Snapdeal To make big in online payment gateways but turns out to be the saving card for Kunal.
The sale of FreeCharge to the country’s third-largest private sector bank on Thursday, which was first reported by ET, was a “great outcome,” Bahl wrote in an email to employees late on Thursday.
This deal helped them to progress in eCommerce business and keep their journey of selling products online.
Bahl and Rohit Bansal, chief operating officer and co-founder, are fighting to retain control of Snapdeal and prevent its sale to Flipkart in a deal that values the Gurgaon-based ecommerce marketplace at $850 million, a far cry from its peak valuation of $6.5 billion barely a year ago.
Snapdeal poor sales and lack of customer retaintion pushed thier total valuation way back down from what it was just an year ago. From $6.5 billion to just $850 million, look here is the fall of nearly 600% in their business and hence Flipkart is trying to buy it’s Indian competition to make more money from the market.
The founders have proposed running what has been described as a leaner and a stripped down version of the ecommerce company, with a smaller workforce, while also selling off other assets, such as its logistics arm Vulcan Express.
Softbank Group Corp. is the largest stake holder of snapdeal and hence they want to sell the company to make money as they nearly invested $1 billion as fund for company’s growth. Right now the board is divided due to dual mentality of snapdeal future.
The list includes PremjiInvest, the personal investment arm of Wipro Chairman Azim Premji, BlackRock, Temasek, the investment firm backed by the government of Singapore, Ontario Teachers’ Pension Plan, Foxconn and Alibaba Group, which do not have board representation and cumulatively own about 40% of the company(1).
Jasper Infotech, the parent company of Snapdeal and FreeCharge, is expected to place the Flipkart bid before all stakeholders next week for their approval. Parallelly, it will start negotiating a sale and purchase agreement with Bengaluru-based online domestic retail giant Flipkart.
The board members will have to decide whether to sell the company or continue it with the money of freecharge sell. Hence you never know how thing will turn out once the offer is on the table, but Mr. Bahl is fighting hard not to sell snapdeal.
Flipkart is not going to buy until 100% stakeholder give their node for the sell as many big stakeholder has already opted for sell but Flipkart wants a 100% willingness from all stakeholders.
Freecharge sell to Axis Bank will give some Air to breathe as they can use this money to grow their business and plan accordingly. Lets see how thing will go around and we will update you once the board has decided whether to sell or hold snapdeal.