SUMMARY
Axis Bank Is Currently Conducting Due Diligence On FreeCharge For The Deal
Mumbai-headquartered Axis Bank is reportedly in talks to acquire mobile wallet FreeCharge. A recent report states that the acquisition could fetch $100 Mn (INR 625 Cr) for parent company Jasper.
Axis Bank is currently conducting due diligence on the Snapdeal-owned digital wallet service. Earlier in May 2017, it was reported that Bank of Baroda and Times Internet were also vying for an acquisition deal with FreeCharge. The deal size was then expected to be in the range of $60 Mn-$75 Mn.
Prior to this, both Paytm and MobiKwik have been frontrunners for the FreeCharge acquisition. While Paytm had already signed a non-exclusive term sheet with FreeCharge at an expected deal value of $45 Mn – $90 Mn, MobiKwik deal did not move beyond speculation. There were rumours that, if the deal with MobiKwik goes through, an undisclosed Chinese investor will pump in $200 Mn in the merged entity.
What’s Going On With FreeCharge
Jasper Infotech-owned FreeCharge is in freefall. The digital wallet, once valued at $5 Bn – acquired by the Indian unicorn Snapdeal in a deal worth $400Mn -$500 Mn – today stands on the verge of getting sold for a fraction of that amount.
FreeCharge was left to just ‘wait and watch’ post news surfaced that investor Softbank intends to go through its acquisition only after Snapdeal settlement with Flipkart. Founded in 2010 by Sandeep Tandon and Kunal Shah, FreeCharge’s acquisition talks first came into light in April 2017. This was the time when Softbank proposed the merger of its parent entity Snapdeal with Flipkart. SoftBank at that time pitched the FreeCharge acquisition deal at almost 50% less valuation.
Later in May 2017, parent company Jasper Infotech, also made a fresh investment of $3.38 Mn (INR 22 Cr) in FreeCharge. Prior to this, Snapdeal already pumped $20 Mn into the online payment platform in March 2017.
Freecharge has also seen its share of structural and leadership changes since April 2017. The company appointed former Housing CEO Jason Kothari as the Chief Executive Officer (CEO). This appointment came within a month of its earlier CEO Govind Rajan quitting the company. Govind Rajan had replaced Kunal Shah as the CEO in May 2016.
FreeCharge’s fate seems to be hanging in the balance as more and more contenders pop up out of the woodwork to take over its once-substantial user base. The latest to join the fray is Axis Bank. But who will emerge the ultimate winner remains to be seen.
(The development was reported by ET)
