E-commerce group Alibaba has bought shares in India-based e-commerce and mobile finance company One97 Communications worth about 4.3% through a secondary offering at a $5.7bn to $5.9bn valuation, Livemint reported today.
The shares were acquired from Reliance Capital, an investment subsidiary of conglomerate Reliance Industries; Sapphire Ventures, the venture capital firm spun out of enterprise software producer SAP; and VC fund Saama Capital. All three divested all of their shares, for a total of roughly $250m.
One97 Communications operates a diversified range of e-commerce activities but has become best known for its mobile finance subsidiary, Paytm.
The company is formally splitting its financial services and e-commerce operations, and reports last week stated Alibaba is looking to invest $200m in the latter, which will be known as Paytm E-Commerce, at a $1bn valuation, meaning Alibaba and its Ant Financial affiliate will jointly hold a majority share.
Reliance Capital sold a 0.7% stake in One97 to Alibaba, picking up $41m in the process. Livemint reported that Sapphire Ventures and Saama, both of which first invested in One97 in 2011 when Sapphire was still an SAP unit, could have made a 50-times return on their investments.
One97’s other investors include Ant Financial as well as fabless semiconductor maker MediaTek, which invested $60m in September 2016 at a reported $4.8bn valuation, and growth equity firm SAIF Partners.