Payments firms MobiKwik, FreeCharge may merge in all-stock deal

MobiKwik may soon merge with close rival FreeCharge in an all-stock deal, according to a report in Business Standard. A Chinese investor, keen to foray into India, is willing to pump $200 million into the merged entity. Some banks have also shown interest.

Jason Kothari, chief executive of FreeCharge, has been trying to sell off the e-wallet company for some time now. He has been in talks with various investors in the US and China, Moneycontrol reports.

PayPal had earlier shown interest in investing in FreeCharge, but the deal did not materialise. PayU, backed by Naspers, is also rumoured to be interested in FreeCharge.

FreeCharge is a part of online shopping platform Snapdeal, which is also in merger talks with e-retailer Flipkart.

The merger talks between Freecharge and MobiKwik are in their initial stages. The major investor in both the digital payments companies is Sequoia Capital.

MobiKwik, which has opened 13 offices in the country and has added over 1,000 employees to its workforce, has also been looking to raise over Rs1,000 crore and is in advanced talks with many banks and mutual funds. This round of funding should be initiated by the end of April or early May.

Apart from MobiKwik, others like Flipkart and Paytm are also keen on acquiring Freecharge.

While individually, the two would be valued at $300 million each, together the new entity could be value at $700 million-$1 billion.