Why are Snapdeal and Flipkart pulling all stops to raise money for FreeCharge and PhonePe?
In PhonePe, Flipkart saw an opportunity to repair its self-inflicted wounds in payments
SoftBank, one of Snapdeal’s largest investors, is learned to have refused to put any money in either Snapdeal or FreeCharge
The reasons why neither FreeCharge nor PhonePe have been able to successfully raise funds are: high valuations, unrealistic expectations and non-existent moats
Unlike wallet apps like Paytm, MobiKwik or even FreeCharge, PhonePe has no merchant network or ownership
FreeCharge, India’s second-largest mobile wallet company, must easily be the most sought after investment in Indian e-commerce, even though technically it isn’t even for sale.
How else would you explain the steady stream of deep-pocketed international investors that have been in the final stages of discussions to invest in it?
SoftBank and Foxconn started conversations with it to invest around $300 million in October 2015, just six months after FreeCharge was acquired by Snapdeal, India’s third-largest e-commerce company. Snapdeal is understood to have paid approximately $150 million in cash and $300 million in its own stock to acquire FreeCharge.
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