Vulcan Express To Be Part Of Flipkart- Snapdeal Deal; Fate Of FreeCharge Still In Limbo

The logistics arm of Snapdeal, Vulcan Express, will be part of the Flipkart-Snapdeal merger being engineered by Japan’s SoftBank Group Corp., two people privy to the development told BloombergQuint requesting anonymity as the talks are private.

The future of Vulcan now depends on the final contours of the deal, one of the people quoted above said.

Vulcan Express was formed in 2014, but it emerged after Snapdeal decided to have its own logistics arm last year, abandoning its plan to acquire logistics arm GoJavas. Snapdeal had invested close to Rs 250 crore in GoJavas and owned over 40 percent stake.

Also Read: What A Flipkart-Snapdeal Marriage Will Mean As SoftBank Plays Matchmaker

Flipkart outsources despite having its own logistics arm, and it won’t hurt the online retailer to extend its services via Vulcan, the second person quoted above said. Whether Vulcan will be merged with e-kart is yet to be decided, the person said.

Vulcan operates in 100 cities, does about 55 percent of Snapdeal’s total deliveries and the rest are outsourced, the person said.

The fate of FreeCharge is still in limbo. The digital payments platform was acquired by Snapdeal for about $400-450 million in 2015. FreeCharge is in talks with four firms, including Paytm, PayPal, Times Internet and one new-age bank, the people quoted above added. The deal size is expected to be in the range of $40-70 million.

Snapdeal, run by Jasper Infotech Pvt. Ltd., is inching closer to a deal with Flipkart as the due diligence is on between parties involved, the people said. A decision on the deal is likely by the third week of June, the second person quoted above said.

The Bengaluru-headquartered Flipkart also raised $1.4 billion from technology giants and acquired eBay India recently. Once a merger with Snapdeal is through, SoftBank is willing to infuse up to $1 billion in the e-commerce company in a deal with Tiger Global Management, the largest investor in Flipkart, according to a Bloomberg report quoting people familiar with the development.

Also Read: Why Flipkart Needs More Than SoftBank To Take On Amazon