FreeCharge lost Rs 356 Cr in FY17 – close to the acquisition amount offered by Axis Bank

FreeCharge

FreeCharge is no more a startup or a Snapdeal-owned company. Now, FreeCharge has been acquired by Axis Bank.

It’s financial figures, however, have to be reported, as they were prior to the acquisition. Previously hailed as Snapdeal’s crowning gem, it had slipped to the fourth position after Paytm, PhonePe, and MobiKwik in the digital payment game.

Registrar of Companies (RoC) filings reveal that FreeCharge has recorded an 11.5X jump in losses to Rs 356 crore in FY17 from Rs 30.9 crore in the preceding fiscal.

Meanwhile, the company revenue grew by 4X to Rs 25 crore from Rs 5 crore in FY16. It is worth noting that during FY17, FreeCharge was owned by Snapdeal. Axis Bank had acquired it in July 2017, for about Rs 373 crore.

There is only a little difference — a mere Rs 15 crore — between the loss incurred by the payment company in FY17, as compared to the acquisition amount offered by Axis Bank. The loss-revenue proportion of the company increased from 6.25X in the fiscal year 2015-2016 to 14.25X in FY17.

With Rs 203 crore spent alone on advertising and promotion in FY17, the company’s expenses grew by 12.1X from a Rs 15.5 crore figure in the previous FY. The overall expenses of the company increased by 9.6X  from Rs 36 crore to Rs 381 crore in the fiscal year 2016-2017.

Throughout the year, FreeCharge issued Rs 453 crore worth of its equity capital to Jasper Infotech (parent company of Snapdeal), out of which the majority share went into covering the losses of the digital payment company.

Founded by Kunal Shah and Sandeep Tandon in 2010, FreeCharge was hailed as Paytm’s arch-rival and eventually sold in 2015 to the Kunal Bahl-led company for approximately $400 million (cash plus stock deal).

Since FreeCharge has been a subsidiary of Axis Bank, it’s now eyeing to cross-sell financial products including lending, mutual funds, and insurance in near future. Recently, it also entered the UPI ecosystem.

Under the umbrella of private banking major and leadership of Sangram Singh, FreeCharge’s forward journey would be a worthwhile watch.

 

*Update: The earlier version of the article has been re-structured and the headline has been tweaked.

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