Jasper Infotech pumps in additional Rs 30 crore into FreeCharge
BENGALURU | NEW DELHI: Jasper Infotech, which owns and operates digital payments platform FreeCharge, has pumped in an additional Rs 30 crore into the latter, according to documents filed with the registrar of companies.
The latest capital infusion comes a little over two months after Jasper, which also owns and operates online marketplace Snapdeal. com, put in Rs 390 crore in the Bengaluru-based mobile wallet provider, which it acquired for $400-450 million in a cash-andstock deal in mid-2015.
According to the documents filed with the RoC, Jasper purchased the additional shares following a board resolution on February 23. This also follows a special resolution passed in December last year where Free-Charge increased its authorised share capital to Rs 1,006 crore from Rs 6 crore, setting the stage for a significant round of funding.
However, Jasper Infotech, which has been on the road for almost 18 months to raise money for FreeCharge, has found it difficult to rope in investors—strategic or financial—to back its payments unit. A combination of valuation mismatches, reluctance to cede control and the ongoing reluctance of global investors to pump in further capital in the country’s consumer-facing startups have been cited as the primary hurdles for a successful closure of any potential deal.
While Rs 30 crore may seemingly be a marginal amount, the timing of the latest cash infusion is likely to highlight further scrutiny on FreeCharge’s current cash burn, and whether Jasper will have to continue supporting FreeCharge with regular infusions of capital going forward.
Snapdeal has been reportedly in talks with some rival mobile payment companies such as Pay-Pal, Paytm and PayU to sell Free-Charge. The company, however, has denied that it has held any such discussions.
An email questionnaire sent to FreeCharge and Jasper spokespersons, seeking comments on the latest instance of capital infusion, did not elicit any responses at the time of going to press. Some industry experts hinted that the capital infusion could be a survival strategy for Free-Charge, mainly to cover costs of operations and vendor payments. This, however, could not be independently verified by ET.
The latest capital infusion comes a little over two months after Jasper, which also owns and operates online marketplace Snapdeal. com, put in Rs 390 crore in the Bengaluru-based mobile wallet provider, which it acquired for $400-450 million in a cash-andstock deal in mid-2015.
According to the documents filed with the RoC, Jasper purchased the additional shares following a board resolution on February 23. This also follows a special resolution passed in December last year where Free-Charge increased its authorised share capital to Rs 1,006 crore from Rs 6 crore, setting the stage for a significant round of funding.
However, Jasper Infotech, which has been on the road for almost 18 months to raise money for FreeCharge, has found it difficult to rope in investors—strategic or financial—to back its payments unit. A combination of valuation mismatches, reluctance to cede control and the ongoing reluctance of global investors to pump in further capital in the country’s consumer-facing startups have been cited as the primary hurdles for a successful closure of any potential deal.
While Rs 30 crore may seemingly be a marginal amount, the timing of the latest cash infusion is likely to highlight further scrutiny on FreeCharge’s current cash burn, and whether Jasper will have to continue supporting FreeCharge with regular infusions of capital going forward.
Snapdeal has been reportedly in talks with some rival mobile payment companies such as Pay-Pal, Paytm and PayU to sell Free-Charge. The company, however, has denied that it has held any such discussions.
An email questionnaire sent to FreeCharge and Jasper spokespersons, seeking comments on the latest instance of capital infusion, did not elicit any responses at the time of going to press. Some industry experts hinted that the capital infusion could be a survival strategy for Free-Charge, mainly to cover costs of operations and vendor payments. This, however, could not be independently verified by ET.
