FreeCharge, the online recharge and payments platform, hasn’t been able to make the most out of the recent demonetization. On the other hand, Paytm saw the opportunity and reach a new height in terms of market share.
On top of that, the parent company of FreeCharge — Jaspers Infotech, which also owns and operates Snapdeal, has been struggling. There were reports earlier suggesting that Jaspers is looking to sell FreeCharge to generate some working capital.
Earlier, we have heard about FreeCharge to be in talks with various companies for the acquisition, including its rival Paytm. However, nothing seem to have materialized so far.
Now, as per the latest reports, telecom giant Airtel and Mumbai-headquartered Axis Bank are in talks with FreeCharge for the acquisition.
According to the report from Business Standard, Bharti Airtel is among the frontrunners for the acquisition of FreeCharge. If the deal goes through, this could be a major step forward for the company which has recently launched Airtel Payments Bank. The company also has online wallet named Airtel Money.
Another report from Economic Times says that Axis Bank is also among the frontrunners to acquire FreeCharge. The report is based on three people aware of the development. The report further says that Axis Bank is currently conducting due diligence on the company.
Earlier in May 2017, it was reported that Bank of Baroda and Times Internet were also vying for an acquisition deal with FreeCharge. At that time, the deal size was then expected to be in the range of $60 million to $75 million.
Prior to that, Paytm and MobiKwik — both competitors of FreeCharge, were in discussion for the acquisition of Snapdeal-owned payments platform. Reports suggests that Paytm had already signed a non-exclusive term sheet with Snapdeal-owned company at an expected deal value of $45 million – $90 million.
FreeCharge, which was once valued at $5 billion, was acquired by Snapdeal for around $450-500 million. Now, the company is getting acquisition offers for a fraction of that price.
To continue operations, its parent company Jasper Infotech made an investment of $3.38 million. Prior to that, Snapdeal had pumped $20 million into the company in March 2017.
The company has also seen major structural and leadership changes in past one year. Kunal Shah, who founded the company with Govind Rajan, quit from his role as a CEO in May 2016, and Rajan was appointed as the new CEO. Within months, Rajan also quit, and then former Housing.com CEO Jason Kothari was named as the CEO of FreeCharge.
Along with FreeCharge, its parent company Snapdeal is also up for sale. Flipkart, the homegrown e-commerce platform, which initially offered $1 billion for the acquisition, later changed the price to $850 million after due diligence.
The board of Snapdeal rejected the acquisition offer from Flipkart. As per the reports, both the companies are now holding parleys over the $150-200 million valuation gap in the final offer.