Digital payments platform Freecharge which is part of parent Snapdeal, is all set to be bought over by Axis Bank Ltd. for Rs 350-400 crore in cash as per a report by Mihir Dalal in Mint.
Snapdeal is itself in talks to sell itself to rival Flipkart.
Post acquisition of Freecharge, Axis Bank will not only get a popular digital payments brand but also access to high-quality technology, the report says.
Anonymous sources have said that the deal is likely to be announced this week.
Freecharge had also held talks with Paytm but preferred to go with Axis Bank as it offered a higher price.
Law firm Cyril Amarchand Mangaldas represented Axis Bank while Freecharge was represented by J. Sagar Associates.
This comes as a major shake-up in the startup space in India, as Snapdeal had bought Freecharge for $400 million in April 2015, which was at the time, the largest start-up deal in India.
Freecharge was looking to raise funds separately and hit the market last year, the report adds.
Although Snapdeal was hopeful that Freecharge would raise fresh capital at a valuation of $700-900 million even till late January, the deal never came through due to differences between board members.
Since late last year, Snapdeal’s founders and venture capital firms Nexus Venture Partners and Kalaari Capital have been in an ugly boardroom spat which has resulted in Snapdeal and Freecharge missing out on funding deals, initiating job cuts and being forced to look for buyers, the report states.
“The big takeaway from the Snapdeal-Freecharge situation is the fact that the consumer internet market is growing very slowly. This is not China. Just because everyone has internet access does not mean the internet economy is growing,” said Rutvik Doshi, director at the India arm of Inventus Capital Partners.