Softbank proposes to sell Freecharge for $200 million; 50% drop in valuation

Softbank, Snapdeal’s largest shareholder with more than 30% stake, is proposing to sell Freecharge, the mobile wallet platform owned by Snapdeal, at an estimated valuation of $150-200 million which is significantly lower than the $400 million which Snapdeal paid for the startup. PayTM is expected to be the frontrunner in the discussions with Softbank. Freecharge has been in discussions with potential buyers such as PayPal and PayU for fresh capital at a valuation of $900 million, however, those talks never materialized.

As per an analyst, “A lot has changed with both Snapdeal and Freecharge in the last quarter. Paytm is interested in Freecharge but only if the math is reworked. It also wants exclusive rights along with the deal to become the sole payments platform for Flipkart and Snapdeal. As these e-tailers have plans to sell financial products in the long term, such exclusivity agreements will help Paytm’s financial services business”.

However, Snapdeal is going through different rounds of negotiations with Flipkart too for sale. Softbank is leading the sale negotiations with Flipkart, and guarantee further funding for the combined entity if the deal goes through.