Axis Bank has agreed to acquire mobile payments wallet provider FreeCharge from e-commerce company Snapdeal for Rs. 385 crore. The latest deal comes just a day after Snapdeal board approved Flipkart’s $900- $950 million buyout offer.
As a result of the deal, about 200 Freecharge employees will join Axis Bank. The acquisition marks the first such acquisition of a digital payments company by a bank in India. The deal is subject to regulatory approval from the Reserve Bank of India (RBI). Snapdeal had acquired Freecharge for $450 million in April 2015 following which it integrated Freecharge wallet into its Android and iOS mobile apps in 2016.
Kunal Bahl, co-founder and chief executive officer of Snapdeal said,
It is a win-win deal that allows Snapdeal to further focus on our core e-commerce business, while giving Axis some of the most agile and innovative technology capabilities in the financial services space in India.
Shikha Sharma, managing director and chief executive officer of Axis Bank said,
The acquisition of FreeCharge re-affirms Axis Bank’s determination to lead the journey of digitization of financial services. We expect FreeCharge to contribute significantly in our aspiration to serve the digital native and mobile-first young consumers of India.
Digital payment services like Paytm and Freecharge have become a hit post demonetization.