Alibaba’s Alipay to bid for Freecharge acquisition; Amazon infuses Rs 130 crore in payments arm

Many companies are interested in buying digital payments company Freecharge. And the buyers are not restricted to the ecommerce industry. From Indian banks to rival digital wallet firms, there’s no dearth of companies looking to acquire the Kunal Shah-led company.

But industry watchers are astonished by the entry of the newest ecommerce firm in the bidders list. According to reports, Alibaba’s online payment platform Alipay is going to bid for Freecharge.

In May 2017, Mobikwik was the front-runner. The scenario changed in the next two months with Axis Bank emerging as the top contender. Then Bank of Baroda (BOB) joined the bidding war. According to sources, not only Axis’s offer is $15-20 million more than BOB but the bank has also started due diligence of Freecharge.

But with Alipay entering the scene, Freecharge could get a better offer from the Chinese ecommerce leader’s payments unit.

Freecharge’s potential buyers list

Ever since Freecharge went up for sale, many firms expressed their interest in acquiring it. Few of them are:

• Flipkart
• PayPal
• Paytm
• Mobikwik
• Axis Bank
• Bank of Baroda
• Airtel
• Alipay

Snapdeal could benefit from this?

As per industry watchers, yes.

Freecharge’s parent organization Snapdeal is also busy with its own acquisition deal with Flipkart. After rejecting the first offer of $850 million, the Kunal Bahl-led company is waiting for a better offer from the Bansals. The etailer believes that if Freecharge gets sold for an impressive figure, then they would be able to hike up their sale price.

“Hopes of a better deal for Freecharge has raised the bargaining power of Snapdeal during its talks with Flipkart. The better valuation for its affiliates like Freecharge and Vulcan will provide Snapdeal the interim working capital required to run the business, while giving them an edge over Flipkart on the negotiating table,” a source revealed

Alibaba’s global rival Amazon pours Rs. 130 crore in its payments vertical

While we are on the subject of digital payments companies, there’s another interesting update.

Amazon just took out Rs. 130 crore from its heavy wallet and poured it into its payments arm Amazon Pay. As per the Registrar of Companies regulatory filings, the ecommerce giant sanctioned the funding decision on June 28th.

For those maintaining a record, Amazon had infused Rs. 67 crore into its payments unit few months back, which was reported in May this year. Around the same time, Freecharge too had received Rs. 22 crore from parent company Jasper Infotech

According to some reports, Alibaba-backed Paytm could be out of the running (Freecharge acquisition) due to differences in valuation. That could be the reason why Alibaba stepped in. If Alipay manages to acquire Freecharge, then Flipkart and Amazon might have a reason to worry. In addition, the Indian turf would get to witness the legendary Alibaba-Amazon rivalry.