Indian ecommerce company Snapdeal, which has accepted a buyout offer of US$900 million to US$950 million from arch rival Flipkart, is selling its digital wallet FreeCharge separately to Axis Bank for US$60 million. The Snapdeal board has cleared the deal, reports the Economic Times, citing unnamed sources.
Flipkart has its own digital wallet PhonePe, which it acquired last year, so the separate sale of FreeCharge was always on the anvil during the negotiations to buy Snapdeal.
The US$60 million sale of FreeCharge will be a big drop from the US$400 million Snapdeal paid to acquire it in 2015 – the biggest acquisition in India until then. The drop in valuation is similar to that of Snapdeal which was valued at over US$6 billion at the start of 2016.
Alibaba-backed Paytm has made rapid gains to become the leader in the payments space. Snapdeal’s biggest investor SoftBank made a solo bet of US$1.4 billion in Paytm three months ago.
But for Axis Bank, the acquisition of FreeCharge and its user base could give a boost to its digitization efforts. Banks are looking at ways to partner or acquire startups to keep up with the rapidly evolving fintech scene.
Tech in Asia has reached out to Snapdeal and Axis Bank for comment.