The year 2017 sees yet another consolidation with Paytm signing a non-exclusive term sheet to acquire Freecharge. While the Vijay Sharma-led Paytm is Alibaba backed, Freecharge is operated by Snapdeal.
Freecharge was earlier in talks with multiple other players including wallet major MobiKwik and global payments giant PayPal. In the last week of April, there were reports of Japan’s Soft-Bank investing $1.4 billion in Paytm.
The deal size is expected to be between $70 billion to $90 billion according to media sources. This can be seen as a sharp drop in the valuation of Freecharge which was acquired by Snapdeal for $400-450 million in April 2015. The devaluation of the company is due to the current status of parent Snapdeal, which is also in talks with multiple parties to outright sell.
As compared to Freecharge, Paytm claimed to have a user base of 218 million on 26 April this year and eyes to expand it to 500 million by 2020.