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The Snapdeal board is on the verge of closing the deal to sell payments platform FreeCharge to Axis Bank for about ₹400 crore ($60 million), in the next few days. The deal will give the ailing marketplace the much-required cash to run its operations. Snapdeal acquired FreeCharge in April 2015 for $400 million, when FreeCharge was largely a recharge platform. Snapdeal pumped in over ₹500 crore to build the product into a strong payments technology platform.
Sources said Snapdeal had to sell it off for one-sixth of the acquisition cost as FreeCharge was being valued only for its payment technology engine and not for the business that it is expected to generate. The payments platform lost a large chunk of its customer base when the parent company stopped investing in it from January. “There was no money for operations, partnerships or promotions, and it was obvious that Snapdeal, which was itself in a soup, will not anymore invest in FreeCharge,” said a source.
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