Axis Bank has agreed to acquire mobile payments wallet provider FreeCharge from e-commerce company Snapdeal for Rs. 385 crore. The latest deal comes just a day after Snapdeal board approved Flipkart’s $900- $950 million buyout offer.
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As a result of the deal, about 200 Freecharge employees will join Axis Bank. The acquisition marks the first such acquisition of a digital payments company by a bank in India. The deal is subject to regulatory approval from the Reserve Bank of India (RBI). Snapdeal had acquired Freecharge for $450 million in April 2015 following which it integrated Freecharge wallet into its Android and iOS mobile apps in 2016.
Kunal Bahl, co-founder and chief executive officer of Snapdeal said,
It is a win-win deal that allows Snapdeal to further focus on our core e-commerce business, while giving Axis some of the most agile and innovative technology capabilities in the financial services space in India.
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Shikha Sharma, managing director and chief executive officer of Axis Bank said,
The acquisition of FreeCharge re-affirms Axis Bank’s determination to lead the journey of digitization of financial services. We expect FreeCharge to contribute significantly in our aspiration to serve the digital native and mobile-first young consumers of India.
Digital payment services like Paytm and Freecharge have become a hit post demonetization.