Paytm raises Dollars 1.4 billion from Softbank Group Corp

Cornelia Mascio
Mag 20, 2017

The Japanese internet and telecom giant Softbank has led one of the largest investment rounds in Indian startup scene by investing $1.4 billion (approx Rs 9,000 Cr) in Paytm.

However, the largest ecommerce platform in India, Paytm, plans to invest Rs. 10,000 crore (approximately Dollars 1.6bn) over the next three to five years towards enabling half a billion Indians to join the mainstream economy.

SoftBank, an early investor in Alibaba, has committed investments of over $10 billion in India. Softbank has pledged an investment of US$1.4 bn to gain 20% stake in the company, which now pushes the valuation of Paytm past US$7.0 bn, making it the second most valuable startup in the country, only behind Flipkart.

SoftBank's wager on Paytm comes at a time when it is consolidating its India bets and putting its weight behind category leaders in the cash-guzzling consumer internet sector.

Viajy further said that it is a great opportunity for the company to bring financial inclusion to half a billion Indians. "We have already partnered with banks and startups in this space along with the planned launch of our payments bank next week", Sharma of Paytm, told TOI.

In addition, Paytm witnessed an uptake in its movie ticketing and travel booking (rail, bus and flight tickets) businesses.

Investors like Softbank are betting big on Paytm as they expect to re-write the Alipay success story in China here in India. While it has pumped in close to $2 billion into Indian start-ups like Snapdeal, Ola in last few years.

SoftBank joins Alibaba and its payments affiliate Ant Financial as amongst the largest investors in One97 Communications which operates Paytm.

Paytm offers mobile wallet (over 220 million users) and e-commerce services and will launch its payments bank operations from May 23. The company had to write off a significant portion of that after the devaluation of those investments. Past year it had raised $60 million from Taiwanese chip maker MediaTek.

"We are committed to transforming the lives of hundreds of millions of Indian consumers and merchants by providing them digital access to a broad array of financial services, including mobile payments", said Son. Acronym for "Pay Through Mobile", it was launched in August 2010 as an online recharges and bill payments platform and soon expanded into ubiquitous online and offline use-cases.

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