The Paytm-FreeCharge deal might get delayed until Snapdeal’s transaction gets through

The Paytm-FreeCharge deal might get delayed until Snapdeal’s transaction gets through

Business

It was rumored that Paytm will take over FreeCharge with the participation of SoftBank, but it seems that it might take some more time, as the Investor wants to clear the picture of the Snapdeal first. It has planned to center on the union of the bigger entities than coming on to Paytm and FreeCharge.

A report from Factory Daily states that SoftBank is setting up the plans moderately in the case for selling Jasper Infotech, which is a parent company of Snapdeal. SoftBank doesn’t want to give away the e-commerce business of Snapdeal to the local rival Flipkart hastily as well as the online payment platform, FreeCharge to archenemy Paytm.

The Paytm-FreeCharge deal might get delayed until Snapdeal’s transaction gets through

This indicates that SoftBank is striving hard for flourishing merger amid cash-needy Snapdeal and Indian e-commerce giant, Flipkart, who recently got a top-up funding of $1.4 Billion and took over the enormous, eBay India.

Flipkart and Snapdeal’s merger stories have been on the web and it has been known that the two e-commerce giants have inked a pact for the same. The key supporter of this transaction is the SoftBank who wants to make a comeback in the India’s growing startup system, by uniting its current but non-performing bets. The investor was busy solving the splits between itself and its earlier investors such as Kalaari Capital and Nexus Venture Partners.

As per the report, SoftBank is exceptionally impatient for the Snapdeal–Flipkart merger and is looking forward to make it happen immediately. The Japanese telecom giant believes that this deal would give the cash-starved e-commerce player a little relief from its current circumstances. Snapdeal at the moment is supporting its impetus with $17.5 Million emergency funds that are invested by the company’s co-founders, Rohit Bansal and Kunal Bahl and Nexus Venture Partners.

For those who are unaware of the Snapdeal’s situation that it is facing some severe difficulties since a long time, it has already gone through cash crunch, owing to which it had to lay off 600 employees, as well as founders had to leave their yearly compensations. This has allowed the company to work out the oddity and lengthen their time limit for enduring on on-hand capital.

On the other hand, the second largest payment platform, FreeCharge, has also started a discussion about the acquisition with a similar platform, Paytm.

Focusing on the figures, the deal of Paytm isn’t considered as fair transactions as the Paytm is in plans to pour about $100–$150 Million for the acquisition of 80% stake of FreeCharge. This ultimately means that valuation of FreeCharge will go down owing to lack of technology advancement, intense competition, and the shortage of cash.

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