FreeCharge, the online payments platform owned by the struggling eCommerce company Snapdeal, was acquired by Axis Bank last week in a deal worth Rs 385 crore.
As a part of the acquisition, the entire team of FreeCharge was absorbed by the bank. Now, to ensure that the employees don’t quit the company as Axis Bank takes over the control, they are being offered retention bonus.
As per the reports, FreeCharge employees are being hand out six month retention bonus, based on employees’ seniority and the time spent in the organisation.
People who are aware of the development said that the move is linked to employees stock ownership plan (ESOPs) since FreeCharge’s valuation eroded significantly over the last one year. A person aware of the matter said, “These ESOPs are of little or no value at all. So, getting a retention bonus for a six-month period is a sound option to go for.”
Snapdeal had bought FreeCharge a couple of years ago for around $400-450 million in a cash and stock deal. Now, the company has been acquired by Axis Bank for Rs 385 crore, a fraction of its peak valuation.
On the other hand, Snapdeal’s largest investor SoftBank has been orchestrating its merger with bigger rival Flipkart. But the process which is still under way with multiple hurdles has restricted the completion of the deal.
The acquisition deal marked a closure to a 2-year long process during which Gurgaon-based Jasper Infotech was looking to raise fresh funding for FreeCharge to compete against the market leader Paytm.