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Axis Bank buys Freecharge for $60 million cash; Our take

Axis Bank has bought Freecharge for $60 million (Rs 385 crores) in cash, the bank has informed the stock exchanges. This deal, and the amount, had been reported by The Economic Times yesterday, but at that time, was unconfirmed. Two companies: Accelyst Solutions and Freecharge Payment Technologies Pvt Ltd (FPTPL) are being acquired, with assets worth Rs 275.8 crores, and combined revenues of Rs 67.2 crores. Accelyst is “in the payments processing business”, while FPTPL was running the semi close prepaid wallets business, licensed by the RBI. The deal is pending approval from the RBI and IRDAI.

Note that Accelyst was the company acquired by Snapdeal in March 2015, for $300 million. FPTPL was the company set up for acquiring the wallet license, which it got in December 2016. Prior to setting up FPTPL, Freecharge used to run a wallet with Yes Bank. The company claimed to have 10 million wallet users in November 2015.

The deal is a significant decline in value for Freecharge, which – it is believed – was acquired by Snapdeal for Rs 2400 crores. Much of the team that built/ran Freecharge exited: Alok Goel left immediately post the acquisition by SnapdealRajesh Bysani went to Zoomcar, Pravin Jadhav left for Servify, among others. Govind Rajan, who had joined Snapdeal from Airtel, took over Freecharge CEO from Founder Kunal Shah, who took on a largely non-executive role as Chairman. Rajan left earlier this year. Jason Kothari, allegedly Softbank’s “man for readying a sale” took over in March, a month after layoffs at Freecharge.

My take on the acquisition

Freecharge looks like it failed to capitalise on demonetization growth that others like Paytm and Mobikwik did: it either didn’t have the resources, or the management bandwidth, owing to Snapdeal’s own struggles. The fact that it wasn’t an independent business probably hurt it. Similarweb is not the best indication of traffic, but that’s a pretty sharp decline in visits…


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Over the past few weeks, Paypal, Paytm and Mobikwik have been reported as potential suitors for Freecharge. That Axis Bank was its final destination should tell you something: that the other payments businesses didn’t value Freecharge as much as Axis Bank did. It’s unlikely, given the financial state that Snapdeal appears to be in, that it would have chosen Axis Bank merely because they would allow Freecharge to remain an independent brand, or because of a fit between the teams.

For Axis Bank, if you ask me, it makes no sense to buy Freecharge, even for $60 million. It couldn’t have been for a wallet license: as a bank, they don’t need it. The customer acquisition would only have been for the wallet business and if they have plans to launch affiliate businesses. That said, payments is a massively loss making business at present, focused on consumer acquisition, and in a state of very high competition. It’s unlikely that they’ll have the agility that a Paytm or a Mobikwik have demonstrated, or that they’ll be willing to sink the kind of money that Alibaba allows Paytm to.

Here’s what Freecharge founder Kunal Shah had to say about the deal (on Facebook):

“27 months ago, team at FreeCharge was neck to neck with top player and had the choice of going solo with 95M dollars we had in bank or merge with a larger company to have step function growth. We chose to merge.

Most internet exits in India have been due to distress or common investors wanting to cut losses and merge their portfolio companies, but we had none of that situation and we chose this path to become bigger. This choice allowed us to create wealth for every team member that no internet company has ever achieved in India.

The choice we made didn’t work out as planned for several reasons but super proud of what we achieved as a team and product. We grew 3x on almost all metrics post exit with low capital at hand. Happy about the news and wish FreeCharge a great success with Axis Bank.”

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Written By

Founder @ MediaNama. TED Fellow. Asia21 Fellow @ Asia Society. Co-founder SaveTheInternet.in and Internet Freedom Foundation. Advisory board @ CyberBRICS

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.



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