The story of Indian fintech industry is far from over. If we thought that Paytm and a bunch of Indian banks will now rule the roost, then think again… Because Alibaba has turned aggressive.
Meanwhile, reports are emerging that Flipkart may sweeten the deal for acquiring Snapdeal, as an offer more than $700-750 million, which was earlier offered.
And if we analyse deeply, we will find that both of these developments are somehow related.
What shall be the reaction of Amazon here? We will soon find out…
Alipay Jumps Into The Race To Acquire Freecharge
When reports emerged that Axis Bank has offered between $80-100 million for Freecharge, then speculations emerged that maybe Indian banks will now enter the fintech market and try to grab a share of established players such as Paytm and others.
Besides Axis Bank, and Paytm, Bank Of Baroda was also interested in acquiring Freecharge.
But the dynamics of this race has now suddenly changed, with the arrival of Alibaba in the picture.
In a move which surprised even the most hardcore analyst of fintech industry, Alibaba has deployed Alipay as a possible contender for acquiring Freecharge, which was acquired by Snapdeal for $400 million.
This can create several exciting possibilities for Snapdeal because now, they can bargain harder for their own merger with Flipkart.
As per reports coming in, Alipay’s bid for Freecharge is much higher than Axis Bank’s proposed bid, which is $20-22 million more than what Bank of Baroda has offered.
Paytm, it seems, is the lowest bidder for Freecharge now.
The third angle to this interesting scenario is Tencent, which is a fierce competitor of Alipay in China. Last year, talks were on between Tencent and Freecharge regarding a possible investment to the tune of $150 million.
If Alipay is able to acquire Freecharge, it shall be one of the largest heist by Alibaba in India, after Paytm.
Things are warming up for Freecharge as the management has started buying back ESOPs given to old timers within the company. This clearly showcases that something big is brewing up.
Flipkart May Sweeten The Deal For Snapdeal
Meanwhile, as a direct result of reports about Freecharge’s possible acquisition by Alipay, Flipkart has agreed to sweeten the deal for acquiring Snapdeal.
Earlier this year, Snapdeal had rejected Flipkart’s offer of $700-750 million.
As per a source, close to the deal, said, “Hopes of a better deal for Freecharge has raised the bargaining power of Snapdeal during its talks with Flipkart. The better valuation for its affiliates like Freecharge and Vulcan will provide Snapdeal with the interim working capital required to run the business while giving them an edge over Flipkart on the negotiating table.”
It seems that Flipkart may agree to pay up to $900 to $950 million for acquiring Snapdeal now.
We will keep you updated as we receive more information.
"Alibaba Turns Aggressive, Alipay In Fray Buy Freecharge; Flipkart May Come Up With Better Deal For Snapdeal",