Axis Bank, the third largest private sector bank in India, has announced that it is acquiring online payments startup FreeCharge for ₹385 crore ($60 million).
After a two-year long process and multiple offers, the Snapdeal-owned company has finally decided to take Axis Bank’s offer.
The filing with the stock market reveals that Axis Bank is paying ₹385 crore to acquire 100 percent stake in Freecharge Payment Technologies and Accelyst Solutions Pvt Ltd.
Freecharge Payment Technologies operates the company’s semi-closed wallet license provided by RBI while Accelyst manages FreeCharge’s online services like online recharge, bill payment, coupon services and distribution of mutual funds and insurance products apart from a marketing platform for third parties.
The deal is a steep markdown on FreeCharge’s valuation, which was acquired by Snapdeal in the year 2015 for about $400-450 million. Now, its getting acquired for just $60 million (₹385 crore).
Along with Axis Bank, Bharti Airtel was also among the frontrunners for the acquisition of the payments startup. Earlier this week, Amazon also placed its bid for around $60-65 million.
Prior to this, many other companies were said to be in discussions with FreeCharge for the acquisition, including its rivals — Paytm and MobiKwik. Even Paypal was said to be in discussions to acquire the company.
In May this year, reports emerged stating 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.
FreeCharge, which was once valued at $5 billion, was acquired by Snapdeal for around $450-500 million. Now, the company is getting acquired for a fraction of that price.
To continue operations, its parent company Jasper Infotech had recently made an investment of $3.38 million. Prior to that, Snapdeal had pumped $20 million into the company in March 2017.
While the fate of Snapdeal has now been sealed, next in line is Snapdeal. Reports suggests that the company’s board has approved Flipkart’s revised acquisition offer for $950 million. The deal is expected to be announced officially by the end of this week.