Axis Bank acquires payments wallet FreeCharge for $60M

One of the largest private sector banks in India, Axis Bank, has agreed to acquire payments wallet, Freecharge, for $60 million (INR 385 core). According to media reports FreeCharge’s parent company Snapdeal is nearing a merger with Flipkart, hence, the payment wallet was put up on the block. FreeCharge was acquired by Snapdeal for $400 million in 2015. The current acquisition amount is almost a 90% drop in the price Snapdeal had bought the payments wallet for, two years back. Some reports claim that Amazon and Paytm had also made bids for the acquisition. While in April Paytm was offering Snapdeal $200 million according to a Business Today report, recently that bid was down to $10-20 million, as per a NDTV report. In may Paytm had signed a non-exclusive term sheet to acquire rival FreeCharge, according to a Economic Times report which quoted different sources as saying that the deal is estimated to be between $45 million and $90 million. The private bank is acquiring a 100% equity stake in Accelyst Solutions and FreeCharge Payment Technologies according to a filing to the stock market. Accelyst is the owner and operator of FreeCharge’s online services like online recharge, bill payment, coupon services and distribution of mutual funds and insurance products and FreeCharge Payments Technologies operates semi-closed wallet license provided by the RBI. As part of the acquisition, 200 employees from FreeCharge will be joining Axis Bank and subject to regulatory approvals the acquisition is expected to conclude by the end of September this year. In a report, Axis Bank has stated that the decision of merging FreeCharge with the bank’s existing wallet or operating it as a separate entity will be taken post regulatory discussions. However, Gadgets 360 claims that Shikha Sharma, MD and CEO of Axis Bank, who has recently been reappointed, said that the company is excited about FreeCharge’s capabilities, technology, customer base and would like to continue with the brand. FreeCharge claims to have over 50 million wallet customers but had been lagging behind Alibaba and SoftBank backed Paytm, which has over 225 million customers, and another peer in the category, MobiKwik. Last year FreeCharge stated to have revenues worth $12 million and a gross merchandize value of $420 million. “The choice we made didn’t work out as planned for several reasons but super proud of what we achieved as a team and product. We grew 3x on almost all metrics post exit with low capital at hand. Happy about the news and wish FreeCharge a great success with Axis Bank,” said Kunal Shah, Founder, FreeCharge said on his Facebook page.

27 months ago, team at FreeCharge was neck to neck with top player and had the choice of going solo with 95M dollars we…

Posted by Kunal Shah on Wednesday, 26 July 2017

Abhinav Mohapatra

An author who has a keen interest for the ‘off-beat’ <!--more-->An author who has a keen interest for the ‘off-beat’, he has covered and explored multiple facets of the marketing, advertising

Great! You've successfully subscribed.
Great! Next, complete checkout for full access.
Welcome back! You've successfully signed in.
Success! Your account is fully activated, you now have access to all content.