Axis Bank buys FreeCharge from Snapdeal for $60 mn

NEW DELHI: Private-sector lender Axis Bank has acquired e-commerce firm Snapdeal’s digital payments platform FreeCharge for about Rs 385 crore ($60 million), filings with the Bombay Stock Exchange show.

“The Bank has today entered into a share purchase agreement with Jasper Infotech Pvt Ltd (Snapdeal) to acquire 100% equity capital of Accelyst Solutions Pvt Ltd and Freecharge Payment Technologies Pvt Ltd (Accelyst and Freecharge Payment collectively referred to as ‘Freecharge’),” Axis Bank informed the BSE.

The deal is subject to requisite regulatory approvals, including from the Reserve Bank of India, Axis Bank added.

By acquiring FreeCharge, Axis Bank will get access to 40-50 million mobile wallet users as well as the firm's strong tech team, brand value, and patented technologies.

Even though several names had emerged as potential buyers for the struggling wallet firm, Axis Bank was in advanced stages of discussions to buy out FreeCharge, a person aware of the development had told.

FreeCharge had been struggling on many fronts. Over the past one year, it was in the news for fundraising efforts. Snapdeal, which acquired FreeCharge in a $400-million stock-and-cash deal in 2015, was earlier looking at raising anywhere between $150 million and $200 million at a valuation of $1 billion for the digital payments unit. Since the acquisition, Snapdeal has been looking to monetise its investment in FreeCharge to build a larger play in mobile commerce.

As efforts to raise funds for the unit failed, FreeCharge has been put up for sale. Since December 2016, various players have been vying to acquire the firm, including Paytm, MobiKwik, Amazon, PayPal, Airtel Money, and Naspers.

In May, Alibaba-backed Paytm signed a non-exclusive term sheet to acquire FreeCharge for $45-90 million in an all-cash deal. But the talks fizzled out over the offered price.
In March this year, Snapdeal appointed Jason Kothari as chief executive officer of FreeCharge. Before joining FreeCharge, Kothari led the turnaround of Softbank-backed online real estate company Housing. Before that, he was chief executive and vice chairman of character-based entertainment company Valiant Entertainment, where he led the company out of bankruptcy and successfully turned it around. The FreeCharge acquisition will be another one of Kothari's success stories.

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