Amid surplus of financial technological solutions, which were posing different kinds of dilemmas to conventional banks, they have found a suitable solution – the brick and mortar banks are adopting the new online financial platforms.
In a recent similar development, Bank of Baroda is in talks with Snapdeal-owned mobile wallet firm FreeCharge. Besides, Times Internet and larger rival Paytm are also in acquisition talks with the wallet firm, people privy to the development told Moneycontrol.
The deal size is expected to be in the range of USD 60-75 million and be an all-cash acquisition.
“All three are the frontrunners for the deal,” said one of the persons in the know.
The development comes at a time when Snapdeal is itself in talks for a stake sale with rival Flipkart. FreeCharge was acquired by e-commerce firm Snapdeal for USD 400 million. A valuation of USD 60-75 million will be a major setback to the beleaguered e-commerce firm.
The deal, if successful, will allow Bank of Baroda to expand the mobile wallet service it launched last year and also get access to millions of young customers FreeCharge has on its platform. Bank of Baroda launched its own mobile wallet M-Clip in 2016.
For Times Internet, a mobile wallet addition to its portfolio will help the company in bill payments and the online shopping space with regards to its existing ventures such as Indiatimes Shopping, Gaana and Cricbuzz etc.
Negotiations are on to ensure that the 200-250 employees of FreeCharge are also absorbed by the firm that acquires the company.
Moneycontrol reported earlier this month that Snapdeal had signed a non-binding letter of intent with Flipkart for the deal. Currently, due diligence of Snapdeal is underway.
Besides these three firms, at least two more parties – a Singapore-based group of investors and another public lender have expressed interest in FreeCharge, according to the Moneycontrol report.
Founded in 2010, FreeCharge has had multiple suitors in the past too, including Naspers-backed PayU. The deal couldn’t be finalised due to lack of consent within the Board of Jaspers Infotech, the parent firm of Snapdeal, according to one of the persons quoted above.
FreeCharge competes with larger rivals Paytm and Mobikwik in the mobile wallet space. Some of the key merchants on its platform are IRCTC, Foodpanda, Swiggy, Zomato, McDonalds, Shoppers Stop and Pantaloons, among others.