Amazon, one of the leading e-commerce platforms in India, has reportedly placed a bid of around ₹466 crore to ₹532 crore for the acquisition of FreeCharge, an online payments startup.
Reports suggests that Amazon’s bid is in the range of $70-$80 million (Rs 466 crore- Rs 532 crore). It suggests that the Seattle-headquartered Amazon and Jasper Infotech, which owns and operates both Snapdeal and Free-Charge, have signed term-sheet last week.
The development comes at a time when FreeCharge is already in advance talks with Axis Bank and Airtel for the acquisition. Over the last two weeks, Axis Bank – India’s third-largest private sector lender, emerged as one of the frontrunners to acquire FreeCharge for $60-$65 million.
On the other hand, Bharti Airtel is also among the frontrunners, bidding amount in the same range. The acquisition of FreeCharge could boost its recently launched payments bank business – Airtel Payments Bank. It could also prove fruitful for its mobile wallet service.
Along with Axis Bank, Bharti Airtel and Amazon, reports suggests that FreeCharge’s rival Paytm has also put in its bid for the acquisition of Snapdeal-owned payments service. In addition, Mobikwik, another online payments startup, was also in a race to acquire the struggling platform.
If the deal goes through with Amazon, the e-commerce leader will most likely roll FreeCharge into its existing payments entity — Amazon Pay. Amazon, which has committed to invest $5 billion in its Indian operations, has recently pumped additional ₹130 crore into Amazon Pay India.
A successful sale of FreeCharge will provide the much-needed cash to Snapdeal. This will give a critical runway of a few more months to the New Delhi-based e-commerce firm, and allow it to survive as a potentially standalone business.
FreeCharge was acquired by Jasper in 2015 in a cash-and-stock deal estimated at more than ₹2,400 crore ($400-450 million). At the time, it was touted as the largest acquisition in the Indian startup space.
However, the payments unit has been seeking a buyer for several months now, even as its parent negotiates the terms for its own sale. Snapdeal, which owns FreeCharge, is also up for sale and is in talks with Flipkart and Infibeam.