Axis Bank Front Runner To Buy FreeCharge

India’s third largest private sector lender, Axis Bank has emerged as one of the key players to acquire the digital payments platform FreeCharge. According to reports, Axis Bank is currently conducting due diligence for the acquisition.

The Economic Times reported according to sources aware of the development a potential deal could deliver a payout of up to $ 100 million to its cash starved parent company Snapdeal. The ecommerce company Snapdeal is in the middle of negotiations itself with Flipkart for a potential takeover.

Jasper Infotech owned FreeCharge which was once valued at $ 5 billion was acquired by Snapdeal in 2015 in a deal worth $ 400 – $ 500 million. The Flipkart-Snapdeal acquisition put the payments wallet on the back seat as majority investor SoftBank planned to sell Snapdeal independently.

In March this year, Snapdeal invested $ 20 million in the online payments platform to accelerate growth post demonetization. Parent company Jasper Infotech also made another investment of $ 3.38 million in May. Post that, Jasper Infotech has been seeking a suitable buyer with reports suggesting that Paytm, MobiKwik, Bank of Baroda and Times Internet were interested in a deal.

In May this year, it was also reported Alibaba backed Paytm had signed a nonexclusive term sheet to acquire Snapdeal in an all cash deal which was pegged at $ 45 – 90 million.

It is estimated that the company has recorded Rs. 300 crores in transaction revenue on about 12 million transactions in April and has forecasted seven million transactions making Rs. 20,000 crores by March 2018.

FreeCharge was founded in 2010 by Kunal Shah and Sandeep Tandon and secured Series A funding of Rs. 200 million from Sequoia Capital in 2011. The digital payments platform also managed to raise $ 33 Million in a Series B funding round from Sequoia Capital, Sofina and Ru-Net in September 2014. They further raised $ 80 million from Hong Kong based fund Tybourne Capital Management and SF based fund Valiant Capital Management along with its existing investors in February 2016.