Ant Financial Services, the online payment affiliate of e-commerce company Alibaba, acquired a 25% share of India-based mobile payment company One97 Communications yesterday.
China-based Ant, better known as Alipay, has not disclosed how much it paid for the stake, but a source told Reuters that its investment was upwards of $500m, and labelled the funding as a ‘precursor’ for an initial public offering by One97.
One97 provides a range of online services but is best known for its mobile payment service Paytm. The funding will enable it to expand its payment platform and increase its user base.
The company raised approximately $46m from semiconductor technology producer Intel, Sapphire Ventures, the venture firm affiliated with software provider SAP, Silicon Valley and SAIF Partners across three rounds between 2008 and 2011.
The stake purchase follows speculation last month concerning an investment by Alibaba in One97. Times of India reported that Alibaba planned to invest $550m for 30% to 40% stake in One97, while VCCircle stated that Alibaba and Alipay would jointly invest $575m, on top of a $60m investment by existing shareholder SAIF Partners.
A representative from Alibaba however told TechCrunch it was not involved in the investment, and that it was implemented entirely by Alipay.
Cyril Han, vice president of Ant Financial, said: “With over one billion people, India’s payments market has vast untapped potential. As smartphone use continues to rise in India, we see great opportunity in the mobile wallet space and Paytm, as a leader in this field, is best equipped to build a mobile payments ecosystem in the country.”