Snapdeal looking to sell its payment business arm Freecharge to PayPal

Snapdeal is in talks with the US based PayPal to sell its payments business subsidiary Freecharge. The deal is expected to value Freecharge at $500 million, compared with the $400 million amount paid by Snapdeal to acquire the same in 2015. The ecommerce startup is in a dire need of fresh capital and have been in discussions with other players also for selling the payments business. The deal is expected to bring in the necessary funds at a time when investors are not pouring in money into ecommerce startups like they were doing in the past. Snapdeal has been going through a rough patch recently with reports of a number of senior level exits and the firm itself giving pink slips to more than 600 employees.

Although PayPal has not commented anything about the deal, the firm has been on a lookout for getting a slice of the country’s digital payment ecosystem. In Feb’17, PayPal India MD Anupam Pahuja said that “We want to play a big role in the digital payments space in India. We want to democratise access to the financial system through our products. There will come a day when cash will be an outdated concept and we feel we are best positioned to attack all pieces of the pipeline”. Though the firm has no domestic product in India, local merchants can sell overseas though it. PayPal has about 192 million customers in more than 200 markets across the world.