India's Paytm raises $1b

Alibaba Group’s Ant Financial unit, SoftBank Vision Fund, and Discovery Capital also participated. The investment values the company at $16 billion, according to The Wall Street Journal, up from $10 billion as recently as last month. It is said to be the most valuable start-up in the country.

“[W]e are committed to bringing half a billion Indians to the mainstream economy by onboarding them in the formal financial ecosystem,” Vijay Sharma, Paytm’s founder and CEO, said in a statement. “This new investment by our current and new investors is a reaffirmation of our commitment to serve Indians with new-age financial services.”

The capital will be used to expand consumer internet offerings including the Paytm Inbox media and chat app, while building out services in lending, insurance, investments, and stockbroking for the mass market. Paytm said it planned to spend INR100 billion ($1.4 billion) during next three years on financial inclusion for underserved Indians.

Founded as a division of mobile services company One97 Communications before being spun off in 2015, Paytm is best known for its digital wallet and payment systems. Users can scan QR codes via mobile device at around eight million retailers in more than 2,000 towns and cities across the country, including in rural areas.

The company’s e-commerce platform, known as Paytm Mall, encompasses consumer goods, travel services, and entertainment. EBay acquired a 5.5% stake in Paytm Mall earlier this year for $165 million, reportedly valuing the business at around $3 billion. The transaction aimed to give eBay sellers access to a rapidly growing consumer market while providing Paytm Mall buyers access to global inventory that would normally be out of reach locally.

Paytm is estimated to have raised some $3.3 billion to date, including a $1.4 billion round in 2017 that featured SoftBank Group and SAIF Partners. Previous investors also include Fontaine Capital Management, SAP Ventures, IDFC Investment Advisors, Intel Capital, Reliance Capital Ventures, and SVB India Advisors. Separately, Alibaba, Ant Financial, SoftBank, and SAIF have invested more than $2 billion in Paytm Mall across three rounds since 2017.

The company is also an active investor in the Indian start-up space. Activity in this vein includes participation in early-stage rounds for professional networking platform TapChief, autorickshaw-hailing app Jugnoo, and mobile marketplace CheckLittle. In June, Sharma contributed to the ecosystem in his own right by joining an approximately $29 million anchor investment in the debut fund from Roots Ventures, a local consumer and technology investor.

Investor interest in India’s fintech and e-commerce spaces has helped accelerate growth in digital consumerism, provide essential infrastructural support for a sector that has traditionally struggled with nationwide scaling, and underpin regulatory efforts to generally modernize the overall economy. Paytm and online retailer Flipkart have been the key start-ups in this process, with the latter being acquired last year by Walmart in a $16 billion deal.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• South Asia
• Consumer
• Financials
• Expansion
• India
• Ant Financial
• Softbank
• Financial Services
• e-commerce
• TMT