Jasper Infotech, which operates online marketplace Snapdeal, is in talks
with existing and new investors to raise about $300 million (Rs 2,000
crore) for its digital services platform FreeCharge, two people aware of
the development have said.
The fundraising exercise, which comes less than three months after it raised about $500 million from Alibaba, Foxconn and SoftBank, is aimed at strengthening FreeCharge and furthering Snapdeal's ability to offer a gamut of goods and services to customers, the sources said.
FreeCharge's parent Accelyst Solutions was bought by Jasper in April for $450 million in the biggest transaction involving Indian startups. SoftBank and Foxconn have started discussions with Jasper Infotech.
Two sovereign funds, whose identities could not immediately ascertain, are also in the running to participate in the funding round, reflecting the attractiveness of the country's digital goods and services space for long-term, conservative investors.
In response to questions from ET, Snapdeal said it does not comment on what it called "speculation." SoftBank, the largest institutional shareholder in Snapdeal, declined to comment.
A potential investment meant solely for FreeCharge will be a departure from earlier capital-raising rounds which have been to fund overall growth. Indeed, rival Flipkart, which has raised about $3.4 billion so far, has also not carried out fundraising meant solely for one unit.
Funding for FreeCharge is also expected to help Snapdeal counter Paytm, which has snagged about $680 million from Alibaba and its affiliate, and is swiftly building capabilities as an online marketplace. Vijay Shekhar Sharma, the founder of the company which owns Paytm, is one of the 11 entities to receive an RBI license to start a payment bank.
Investors have rushed to participate in the country's financial technology space, resulting in investments totalling $1.25 billion across 57 deals in 2015 so far. Last year saw deals worth $140 million in 34 transactions.
FreeCharge, founded in 2010 by Kunal Shah and Sandeep Tandon, launched a digital wallet in September in a tie-up with Yes Bank. Proceeds from the proposed funding round will be used to expand its range of offerings. FreeCharge, along with Snapdeal, has about 8.2 million unique daily users, 20 million stored cards and a combined gross merchandise value of over $4 billion.
Last month, ET reported that Canada-based Ontario Teachers' Pension Plan was likely to acquire a significant minority interest in Jasper, with the proposed transaction valuing it at about $6.5 billion was the first to report in March that Jasper, founded by Wharton alum Kunal Bahl and IIT-Delhi graduate Rohit Bansal, had acquired FreeCharge in a cash and stock deal.
A new funding round is not expected to have any secondary components, thereby ensuring that FreeCharge's investors -- a list that includes Sequoia Capital, hedge funds Valiant Capital and Tybourne Capital, ru-Net and Sofina -- will continue to hold Snapdeal stock which they came to own following the acquisition by Snapdeal.
The acquisition of FreeCharge by Jasper is part of the company's ambitious bid to create a complete ecosystem of goods and services, making it stand apart from rivals Flipkart, the country's largest e-commerce company, and Jeff Bezos-led Amazon, but similar to that created by China's Alibaba Group.
Snapdeal CEO Bahl has said that he expects his company to become the country's largest e-commerce provider, toppling Flipkart, by the end of the current financial year in March.
Alibaba is not expected to participate in the proposed funding round for FreeCharge.
The fundraising exercise, which comes less than three months after it raised about $500 million from Alibaba, Foxconn and SoftBank, is aimed at strengthening FreeCharge and furthering Snapdeal's ability to offer a gamut of goods and services to customers, the sources said.
FreeCharge's parent Accelyst Solutions was bought by Jasper in April for $450 million in the biggest transaction involving Indian startups. SoftBank and Foxconn have started discussions with Jasper Infotech.
Two sovereign funds, whose identities could not immediately ascertain, are also in the running to participate in the funding round, reflecting the attractiveness of the country's digital goods and services space for long-term, conservative investors.
In response to questions from ET, Snapdeal said it does not comment on what it called "speculation." SoftBank, the largest institutional shareholder in Snapdeal, declined to comment.
A potential investment meant solely for FreeCharge will be a departure from earlier capital-raising rounds which have been to fund overall growth. Indeed, rival Flipkart, which has raised about $3.4 billion so far, has also not carried out fundraising meant solely for one unit.
Funding for FreeCharge is also expected to help Snapdeal counter Paytm, which has snagged about $680 million from Alibaba and its affiliate, and is swiftly building capabilities as an online marketplace. Vijay Shekhar Sharma, the founder of the company which owns Paytm, is one of the 11 entities to receive an RBI license to start a payment bank.
Investors have rushed to participate in the country's financial technology space, resulting in investments totalling $1.25 billion across 57 deals in 2015 so far. Last year saw deals worth $140 million in 34 transactions.
FreeCharge, founded in 2010 by Kunal Shah and Sandeep Tandon, launched a digital wallet in September in a tie-up with Yes Bank. Proceeds from the proposed funding round will be used to expand its range of offerings. FreeCharge, along with Snapdeal, has about 8.2 million unique daily users, 20 million stored cards and a combined gross merchandise value of over $4 billion.
Last month, ET reported that Canada-based Ontario Teachers' Pension Plan was likely to acquire a significant minority interest in Jasper, with the proposed transaction valuing it at about $6.5 billion was the first to report in March that Jasper, founded by Wharton alum Kunal Bahl and IIT-Delhi graduate Rohit Bansal, had acquired FreeCharge in a cash and stock deal.
A new funding round is not expected to have any secondary components, thereby ensuring that FreeCharge's investors -- a list that includes Sequoia Capital, hedge funds Valiant Capital and Tybourne Capital, ru-Net and Sofina -- will continue to hold Snapdeal stock which they came to own following the acquisition by Snapdeal.
The acquisition of FreeCharge by Jasper is part of the company's ambitious bid to create a complete ecosystem of goods and services, making it stand apart from rivals Flipkart, the country's largest e-commerce company, and Jeff Bezos-led Amazon, but similar to that created by China's Alibaba Group.
Snapdeal CEO Bahl has said that he expects his company to become the country's largest e-commerce provider, toppling Flipkart, by the end of the current financial year in March.
Alibaba is not expected to participate in the proposed funding round for FreeCharge.
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