One97 Communications, the India-based operator of online payment service Paytm, is set to receive $575m from China-based e-commerce company Alibaba and Alibaba subsidiary Alipay, VCCircle reported today.
The round will also include $60m of funding from venture capital firm SAIF Partners, which will remain One97’s largest shareholder, though its stake in the company will drop from about 50% to just below 40%.
Alibaba’s investment will buy it a stake sized between 30% and 33%. One97 raised $25m from SAIF and Silicon Valley Bank in 2008 before securing an undisclosed amount from semiconductor technology company Intel the following year and $10m from software company SAP in 2011.
One97 had begun funding talks with Singaporean state-backed fund Temasek and even signed a term sheet for an investment before deciding to instead go with Alibaba, sources told VCCircle.
Japan-based telecommunications and internet company SoftBank, which is a shareholder in Alibaba, had also been touted as a prospective investor in One97 late last year before talks collapsed.
VCCircle’s report came hours after Times of India cited sources that claimed Alibaba was set to invest $550m for a stake in One97 between 30% and 40%. Alipay acts as Alibaba’s online payment subsidiary.