He replaces Govind Rajan, who exactly a month ago quit the e-commerce company's digital payments unit for reasons unknown.
Snapdeal has also committed an additional investment of $20 million in FreeCharge. “As India moves towards a cashless and digital economy, we are certain that FreeCharge will play a pivotal role in the transition. We remain committed to the success and vision of FreeCharge,†said Snapdeal chief executive Kunal Bahl.
Kothari’s appointment as FreeCharge’s CEO was not entirely unexpected. At the time when Rajan resigned from his post, Snapdeal had already said that he would lead FreeCharge’s business operations.
Prior to joining Snapdeal in January this year, Kothari led the turnaround of Softbank-backed online real estate company Housing. He was appointed to lead the firm in 2015, after the ouster of then CEO Rahul Yadav. After his appointment, he scaled back businesses, pruned the workforce and shut operations in many cities to keep the company afloat. Housing investors also explored its merger with a number of players, including Softbank-backed Snapdeal, before sealing the deal with PropTiger. The merged entity also raised $55 million in fresh funding from Real Estate Australia (REA) Group and SoftBank. Before that, he was CEO and vice chairman of character-based entertainment company Valiant Entertainment, where he led the successful acquisition out of bankruptcy and turnaround of the company.
The development comes at a time when Snapdeal, including FreeCharge, is struggling on many fronts. Over the past several months, FreeCharge has been in the news for its fundraising efforts. Snapdeal has been struggling to raise anywhere between $150 million and $200 million for FreeCharge. The e-commerce firm acquired the mobile recharge platform in a $400-million stock-and-cash deal in 2015. Since the acquisition, Snapdeal has been looking to monetise its investment in FreeCharge to build a larger play in mobile commerce.
But Kothari's past stints somewhere indicates that more than raising fresh funds for FreeCharge, the company might be more interested in selling off this digital payments entity. In fact, VCCircle recently reported that Snapdeal has been working with several investment banks to sell FreeCharge at a valuation of $400-500 million.
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