Freecharge Secures $3.38 Mn From Owner Jasper Amidst Talks Of Acquisition

Jasper Infotech, which owns and runs Freecharge has made a fresh investment of $3.38 Mn (INR 22 Cr) in the digital payments platform.

As per documents filed with the Registrar of Companies (RoC), Jasper Infotech was allotted 2.2 Cr equity shares at a price of INR 10 per share by Freecharge Payment Technologies. The investment decision was taken as per a Board meeting held on April 28, 2017.

Amidst sale and merger talks with Paytm and MobiKwik, Jasper has increased its stake in Freecharge with this latest investment.

Founded in 2010 by Kunal Shah and Sandeep Tandon, FreeCharge counts investors such as Valiant Capital Management, Tybourne Capital Management, and Sequoia Capital as investors. Snapdeal acquired it in April 2015, for nearly $450 Mn, to strengthen its digital payments arm. Before its acquisition, it had secured funding from Sequoia Capital, Tybourne Capital Management, and San Francisco-based fund Valiant Capital Management.

The funding commitment follows the news of earlier infusion of funds into FreeCharge from Snapdeal’s parent company, Jasper Infotech in January this year. As per documents filed in the last week of December 2016, at the Registrar of Companies (RoC), FreeCharge had received $57.2 Mn (INR 390 Cr) from Jasper Infotech. Following this, it received an additional investment of $20 Mn from Jasper in March 2017.

The startup also saw some major management changes. It appointed former Housing CEO Jason Kothari as the Chief Executive Officer (CEO). This appointment came within a month of its earlier CEO Govind Rajan quitting the company. CEO Govind Rajan had replaced Kunal Shah as the CEO in May 2016.

FreeCharge has been up for sale in the startup market for quite some time now. In December 2016, it was reported that Paypal had placed a bid to acquire 25% stake in FreeCharge, at $200 Mn valuation. However, FreeCharge later refuted these reports and denied any such possibility.

In April 2017, it was reported that FreeCharge was in talks with Gurugram-based mobile wallet company MobiKwik for a potential merger. In the same month reports surfaced that, in an attempt to cut down on mounting losses, Japanese investor SoftBank was looking to sell the entity for around $150 Mn-$200 Mn – on a 50% valuation markdown.

Just last week, reports also surfaced that Paytm was in the final stages to acquire FreeCharge, where the latter had also signed the term sheet for the same. An email sent to FreeCharge awaited response at the time of publication.

[This development was first reported by DealStreetAsia.]