India’s third largest private sector lender Axis Bank Ltd is all set to buy digital payments platform Freecharge from Snapdeal for amount nearing Rs 400 Cr, a much needed relief for Snapdeal.
This payments platform has been seeking a suitable buyer since long, even as its parent company negotiates the terms for its own sale. By this acquisition, Axis Bank will get a popular digital payments platform and access to high-quality tech, which will give it an upper-hand over other banks.
Axis Bank and Freecharge are likely to announce the deal this week, two people familiar with the matter said, on condition of anonymity.
Paytm was also in the lead to acquire Freecharge but Freecharge chose to go with Axis Bank, due to higher bid.
The sale of Freecharge will mark the most stunning collapse in India’s startup world, even more s than that of its parent company, which has recently decided to go with Flipkart for $950 million. Snapdeal bought Freecharge for $400 million in April 2015 in what was then the largest start-up deal in India.
Since late last year, the Snapdeal founders, and venture capital (VC) firms Nexus Venture and Kalaari Capital have been locked in a boardroom battle that has resulted in Snapdeal and Freecharge passing up funding deals, cutting jobs and being forced to seek buyers. SoftBank disagreed with the others over the firm’s valuation in a potential sale or funding round.