India-based mobile payment platform Paytm received $1bn today in a series G round featuring telecommunications conglomerate SoftBank’s Vision Fund and Ant Financial, the financial services affiliate of e-commerce firm Alibaba, TechCrunch reported.
Asset management firm T. Rowe Price led the round, which included venture capital firm Discovery Capital and which valued Paytm at $16bn. Ant Financial contributed $400m to the round, while Vision Fund supplied $200m.
Reports on the round first emerged in March 2019 and, as recently as September it was thought to be likely to close at about to $2bn in equity and debt financing.
SoftBank agreed to an investment two weeks ago under the proviso that Paytm goes public within five years. If an initial public offering does not occur, SoftBank will have the right to sell its shareholding to a third party.
Paytm has built a mobile wallet enabling consumers in India and Japan to pay in brick-and-mortar stores, add credit to smartphones and settle utility bills. It has also entered the e-commerce, gaming and ticketing sectors and increased its focus on signing up merchants in small Indian cities and towns.
The company was founded by One97 Communications, which has also established an e-commerce platform called Paytm Mall, a mutual fund investment service dubbed Paytm Money and a consumer credit provider named Paytm Postpaid.
Paytm will use the series G funds to attract additional small and medium-sized enterprises to its platform and bolster financial services functions including loans and insurance.
The capital will also be able help the company fight increasing competition from multinational players such as e-commerce group Amazon, internet company Google and electronics manufacturer Samsung, which have all launched their own mobile wallets in India.
Chief executive and founder Vijay Shekhar Sharma had previously told TechCrunch his company would seek an initial public offering within two to three years. Much of Paytm’s early funding was raised by One97 Communications directly, though in recent years it has raised capital separately.
One97 has secured more than $3.3bn in funding to date including $60m from fabless semiconductor manufacturer MediaTek in 2016. Ant Financial and Alibaba jointly acquired a 38% stake in in March 2017, buying the shares held by conglomerate Reliance Industries’ Reliance Capital division.
SoftBank subsequently provided $1.4bn through a primary and secondary transaction in mid-2017. Private equity firm Berkshire Hathaway later invested a reported $300m in capital in August 2018, and Paytm’s shareholders also include SAIF Partners.
