Alibaba to invest in Indian e-commerce, payments platform

According to The Wall Street Journal, the Chinese e-commerce giant and Zhejiang Ant Small & Micro Financial Services Group - an operating company of its Alipay payments platform, which has been used for other investments - will hold a combined 30% stake in One97. The funding round is said to value the company at more than $2 billion.

The investment would include an arrangement allowing Indian customers to buy products from Alibaba sites and make payments through Paytm, while Chinese shoppers use Alipay to acquire items through the Patym marketplace.

Paytm claims to be the largest digital goods and mobile commerce platform in India as well as a leading payment services provider to online retailers through its "semi-closed wallet." The Reserve Bank of India defines this as a mobile pre-paid instrument that allows users to load money onto their handsets from a licensed company in order to make payments, but not withdraw money.

Paytm has over 20 million registered users and handles more than 15 million marketplace orders per month. There are also 20 million mobile wallet users.

Headquartered in New Delhi, One97 has more than 1,200 employees with branch offices in five Indian cities and a presence in Africa, Europe, the Middle East and Southeast Asia. One97 was founded in 2000 and started out providing value-added services to Indian mobile operators. As the business expanded, subscription-based content was introduced. Paytm followed in 2009-2010, initially as a mobile recharge and utility bill payments platform, before moving towards a marketplace model.

SAIF Partners and Silicon Valley Bank (SVB) committed $8 million to One97 in 2007, according to AVCJ Research. Intel Capital, Reliance Capital and SVB put in $15 million in 2009, with SAIF investing $10 million the following year. SAP Ventures put in $10 million - classified by One97 as the Series C round - later in 2010.

This is set to be Alibaba's first investment in India's e-commerce industry. The company wants to expand its services beyond China and Jack Ma, Alibaba's founder, said during a visit to India in November that he wanted to invest more in the country.

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• Topics
• Technology
• Consumer
• Financials
• Expansion
• Venture
• South Asia
• TMT
• Consumer
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• India
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• Alibaba Group
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• Growth capital