Snapdeal subsidiary Freecharge is in news again. This time, rumour is ripe that PayPal will be taking 25% stake with valuation tag of $800 mn. Based on report published in leading financial site, the move will bring firepower in Freecharge kitty given the cashless era initiation by Government of India. PayPal is household name in many countries and posses very strong technology coupled with very loyal userbase.
In case, the deal really happen then it will be great return on investment for Snapdeal. The deal will give Freecharge financial muscles to expand their reach and target the small and medium size business too. It will also help traders to go cashless and get the benefit of lower taxes announced by GoI. More interestingly, it will be million $ question for Alibaba approval for the deal being an investor in Snapdeal as deal will immediately impact the growth prospect of Paytm in which Alibaba is having substantial stake.
In my opinion, the deal will be valuation assertive for Snapdeal too and it may help Snapdeal to raise fund at high valuation.
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