After Freecharge-Axis Bank Deal, Snapdeal Co-founder Pens An Emotional Letter To All Employees; Is Flipkart’s Strict Term Sheet The Reason?

Hours after Axis Bank finalized the acquisition of Freecharge for $60 million (approximately Rs 385 crore), co-founder of Snapdeal, the holding company of Freecharge, wrote an emotional letter to all employees.

Although there is no mention of the Flipkart’s possible merger, the vibes coming out of the letter clearly signifies an optimism and a warning about turbulent days ahead.

A day back, Flipkart had sent a strict term sheet to Snapdeal, regarding their possible merger. The conditions mentioned in the term sheet are actually quite harsh, and this can be the reason for the emotional letter penned by Kunal Bahl, co-founder of Snapdeal.

Will Snapdeal reject Flipkart’s offer and stand on their own? Or they have some other plans? We try to explore…

Snapdeal Cofounder’s Emotional Letter

The email from Snapdeal co-founder was sent to all employees, immediately after Axis Bank confirmed that Freecharge has agreed to get acquired for $60 million.

In the letter, Kunal acknowledges the success of Freecharge’s acquisition, as he said,

“Every new beginning comes from some other beginning’s end. Freecharge has been a tremendously enriching experience for us.”

This part is clearly optimism and congratulations to the deal.

But then, things change a little and gives out mixed impressions.

The letter says,

“And now it is time for us to focus our energy and passion on continuing the Snapdeal journey … onwards and upwards for Snapdeal.”

This particular sentence signifies that still, the co-founders of Snapdeal are not ready for the Flipkart offer. And the next sentence proves it:

“For Snapdeal, this is also a great outcome as it provides us the necessary boost in resources to continue our journey towards building e-commerce platform that enables sellers across India to reach consumers in every corner of the country.”

Supporting his own arguments, Kunal says that the introduction of GST has made e-commerce one of the best business opportunities in India.

The letter says,

“With massive revolution happening in our country…with affordable smartphones, a unified GST tax regime, and rising income levels, there is no better time to be in this (e-commerce) business. We have have the opportunity of a lifetime and we must seize it,”

Is Flipkart’s Strict Term Sheet The Reason of This Letter?

A day back, Flipkart had sent a strict term sheet to Snapdeal, wherein several conditions have been placed which needs to be agreed to before their merger is approved.

For instance, the stakeholders must be held liable even after 18-24 months after the merger. As per the conditions put forth by Flipkart, they can hold back $150-200 million, in the case of any happening, and this sum can be released only after a particular time period.

Although Snapdeal has agreed to the amount which Flipkart is ready to pay, the agreement regarding the term sheet is up to the stakeholders, which has around 25-28 members as of now.

Earlier, reports came out that Snapdeal may choose Infibeam over Flipkart, or can choose to survive independently as well.

The letter written by Kunal Bahl to all employees clearly showcases the optimism post-Freecharge deal, and also gives a hint of the turbulent period.

We will keep you updated.