Axis Bank set to buy Jasper's Freecharge for Rs350-400 cr

Axis Bank Ltd has virtually clinched a deal to buy digital payments platform Freecharge for Rs350-400 crore in cash, giving breathing space to parent firm Jasper Infotch Ltd which is in its talks to sell its ecommerce firm Snapdeal to larger rival Flipkart.

By buying Freecharge, Axis Bank will get a digital payments brand as well as access to high-quality technology that traditional companies typically struggle to build compared with internet start-ups, Mint points out.

Axis Bank and Freecharge are likely to announce the deal this week, two people familiar with the matter told the paper on condition of anonymity. Other reports too said the deal is virtually finalised.

Freecharge had also held lengthy talks with Paytm (One97 Communications Ltd) but chose to go with Axis Bank as the private sector bank offered a higher price, reports said.

Axis Bank was represented by the law firm Cyril Amarchand Mangaldas and Freecharge was represented by J. Sagar Associates. Neither used an investment bank for the deal.

The sale of Freecharge will mark the most stunning collapse in India's start-up world, even more so than that of its parent company, which has seen its fortunes dip since the start of 2016, according to Mint. Snapdeal bought Freecharge for $400 million in April 2015 in what was then the largest start-up deal in India.

Last year, Freecharge hit the market to raise funds separately. Until late January, Snapdeal was confident Freecharge would raise fresh capital at a valuation of $700-900 million. But because of differences between board members, Freecharge passed up at least two funding offers.

Since late last year, Snapdeal's founders and venture capital firms Nexus Venture Partners and Kalaari Capital have been locked in a boardroom battle that has resulted in Snapdeal and Freecharge passing up funding deals, cutting jobs and being forced to seek buyers. SoftBank Group Corp, the biggest investor in Snapdeal, disagreed with the others over the firm's valuation in a potential sale or funding round.