India-based digital financial services provider Paytm has begun talks to raise an amount potentially greater than $100m from software producer Microsoft, the Economic Times reported today.
The deal would probably be structured as an extension to the $1bn in series G funding secured by the company at a $16bn valuation in November 2019, according to people briefed on the matter.
Paytm runs a mobile-focused online platform that allows users to pay bills and recharge phone credit and metrocards, and has introduced a range of other services including wealth management, event and travel ticket booking.
The series G round was led by asset manager T. Rowe Price and included Ant Financial, the financial services affiliate of e-commerce firm Alibaba, and internet and telecommunications group SoftBank’s Vision Fund.
A person familiar with the discussions told ET: “The talks with Microsoft began last year when Paytm was in the middle of raising funds. While Microsoft could not participate in the funding then, it is likely to pump in cash now.”
The company has formally received $720m from the November round according to regulatory filings seen by ET. China-based Ant Financial will require permission from the Indian government to provide its share due to recently released guidelines on foreign investment.
Paytm’s owner, One97 Communications, had received an undisclosed amount reported to be $300m from investment holding company Berkshire Hathaway at a $10bn valuation in August 2018.
SoftBank had paid $1.4bn for a 20% stake in One97 the previous year, in a primary and secondary share deal that involved it buying shares from growth equity firm SAIF Partners.
Ant Financial invested $250m to buy a 4.3% stake in One97 earlier in the year, with Reliance Capital, Sapphire Ventures and Saama Capital all selling shares.
The company had already secured $60m from fabless semiconductor provider MediaTek in a 2016 transaction that reportedly boosted its total funding to $760m, following $680m provided by Alibaba and Ant Financial the year before.
