Axis Bank and Snapdeal-owned FreeCharge have reached the final stages of acquisition talks. Jasper Infotech Board has agreed to sell the digital wallet business FreeCharge to Axis Bank for USD 60 Mn, which surprisingly is a mere 15% of FreeCharge’s USD 400 Mn sale to Snapdeal in 2015.
This news comes two weeks after we had the initial reports of Axis Bank holding talks with Jasper Infotech. Back then, the acquisition was expected to fetch USD 100 Mn. In these two weeks, Axis Bank has been conducting due diligence on the e-wallet platform. With this acquisition, Axis Bank aims to strengthen its presence in the Indian digital payments space.
Freecharge was founded in 2010 by Sandeep Tandon and Kunal Shah. Once valued at USD 5 Bn, was acquired by Snapdeal as part of a USD 400 Mn-USD 500 Mn deal. In May 2017, parent company Jasper Infotech infused USD 3.38 Mn into FreeCharge. Before this, in March, Snapdeal made an investment of USD 20 Mn in the online payment platform.
Freecharge’s latest acquisition news is not something new, but has been doing the rounds for more than six months now. In December 2016, it was reported that PayPal was gearing up to acquire a majority stake in FreeCharge. After the news of the proposed Flipkart-Snapdeal merger was first made public in March 2017, FreeCharge started actively seeking out buyers. In May 2017, Jasper Infotech was reportedly looking to sell FreeCharge to Bank of Baroda and Times Internet for USD 60 Mn-USD 75 Mn.
Other potential buyer names that were doing the rounds were Paytm and MobiKwik. In May, Paytm also signed a non-exclusive term sheet with FreeCharge at an expected deal value of USD 45 Mn – USD 90 Mn. There were rumors that, if the deal with MobiKwik went through, an undisclosed Chinese investor would pour USD 200 Mn into the merged entity.
Ecommerce giant Amazon was also reportedly looking to take over the e-wallet platform, as part of its efforts to expand Amazon Pay India. According to sources, Amazon agreed to pay USD 70 Mn-USD 80 Mn for the same. Amidst all the noise, Jasper’s ecommerce firm Snapdeal has also finally accepted Flipkart’s merger offer of USD 900 Mn-USD 950 Mn. This will likely be the final destination for Snapdeal and FreeCharge at least for sometime in future. However, the fate of logistics arm Vulcan Express still remains uncertain.