Monday, 24 July 2017

Investopedia/Daniel Liberto: Amazon Bids $70-$80 Million for Indian Payment Platform

By Daniel Liberto | July 24, 2017 — 6:44 AM EDT

Add To Watchlist

Amazon (AMZN) has tabled a late bid to acquire FreeCharge, the digital payment platform owned by troubled Indian ecommerce company Snapdeal, according to a local media report.

The Economic Times, citing two sources familiar with the matter, reported that Amazon, which recently pledged to continue investing billions in India, the world’s fastest growing ecommerce market, bid between $70 million and $80 million for the firm. The U.S. tech giant reportedly wants to integrate FreeCharge with its online payments processing service Amazon Pay. However, sources believe that Amazon’s offer might have come too late.
Bidding War

According to the Economic Times, Axis Bank is widely tipped to emerge as the winning bidder for FreeCharge, despite offering significantly less than Amazon. India’s third-largest private sector lender reportedly tabled a bid in the region of $60 million to $65 million just over two weeks ago.

Mobile wallet specialist Airtel Money and electronic payment firm Paytm have also been engaged in talks to acquire FreeCharge. The Economic Times claims that Paytm, which counts Alibaba (BABA) among its largest shareholders, bid $10 million.

The fact that Snapdeal is entertaining offers well under the $400 million it paid for FreeCharge in 2015 is indicative of the company’s struggles. Snapdeal, once India's start-up poster boy, has posted heavy losses in recent times, driven by rising expenses, unsuccessful acquisitions and fierce competition from domestic and foreign players such as Amazon and Alibaba in the country’s online retail market. (See also: The Race for India's E-Commerce Market.)

To ease these challenges and raise some much needed cash, Snapdeal has been trying to offload FreeCharge, one of its most attractive assets. It has also been exploring the possibility of selling its entire operation — at the end of last year Alibaba reportedly bid $2 billion to buy out the firm. (See also: India's Snapdeal Denies Reports of Alibaba M&A Interest.)

At its peak, FreeCharge expected to conduct 7 million daily transactions. However, the digital payments platform has since struggled, due in part to a lack of financing from its parent company.

    DropShipping Online

    Start a Free 14 Day Trial Now! Quick & Easy Setup

    Earn $100 per week online

    Become a professional book reviewer. It is completely free.


    Create & Send Surveys For All Purposes. Upgrade Now For More Powerful Features.

Related Articles

    The Race for India's E-Commerce Market (AMZN, BABA)
    With an estimated 1.3 billion people and two-thirds of them below the age of 35, India is the fastest growing worldwide market for e-commerce.
    Great Indian E-Commerce War: Bezos vs Son
    Son's play could create India's largest online retailer, setting his empire up for a head-to-head contest with
    Analyzing Alibaba Vs. Amazon Business Models
    Learn how Alibaba and Amazon compare in terms of each company's applied business model, and understand the markets each company aims to reach.
    Alibaba Increases Stake In Paytm E-Commerce As It Sets Its Sights On India (BABA)
    Alibaba has raised its stake in Paytm E-Commerce as it sets it sights on the hot growing Indian ecommerce market.
    Report: Alibaba Seeks to Raise $2B Via Bullet Loan (BABA)
    China's leading ecommerce player is looking to raise $2 billion in fresh funding via a bullet loan.
    eBay Gearing Up to Invest in India's Flipkart
    eBay and Tencent of China are gearing up to invest in Flipkart, the Indian ecommerce giant.
    Managing Wealth
    Is Amazon Too Diversified?
    Amazon recently posted an unexpectedly large profit. But is the company too diversified for its own good?
    3 Predictions for Amazon in 2016 (AMZN)
    Learn the top three predictions for Amazon in 2016 as the company comes off an exceptional year in terms of revenue and expands into new markets.
    Is Amazon Prime Actually Profitable? (AMZN)
    Learn whether Amazon Prime is actually profitable, and how this depends on whether you take a short-term or long-term focus on Amazon.
    Amazon's Stock Advances on These 3 Factors
    Online retailer Amazon reported earnings today, and market rejoiced.


    The Trump Economy: News and Analysis
    Announcing the Top 100 Most Influential Financial Advisors
    Who is Anthony Scaramucci?
    Why Retiring on 70% of Your Income Might Be Tough
    Investopedia's Guide to Impact Investing

    Work With Investopedia
    About Us Advertise With Us Write For Us Contact Us Careers

© 2017, Investopedia, LLC. Feedback All Rights Reserved Terms Of Use Privacy Policy
Post a Comment