India-based digital payment services provider Paytm is raising $1bn to $2bn in funding from telecommunications group SoftBank’s Vision Fund and Ant Financial, e-commerce firm Alibaba’s financial services affiliate, the Economic Times reported yesterday.
The round will value the company One97 Communications, Paytm’s parent company, at between $16bn and $18bn, people with knowledge of the development told ET, adding that new investors could join existing backers Ant Financial and SoftBank.
One97 is the operator of Paytm, the mobile payment platform responsible for more than 220 million payments last month, and e-commerce platform Paytm Mall, though the entities have increasingly begun raising money separately.
The funding would be used to maintain Paytm’s position in India’s digital payment space, in addition to supporting new offerings such as mutual fund investment platform Paytm Money and consumer credit provider Paytm Postpaid.
Ant Financial and Alibaba jointly own 38% of One97, after buying out conglomerate Reliance Industries’ Reliance Capital unit, Sapphire Ventures and Saama Capital in March 2017. SoftBank holds 19%, having paid $1.4bn for a 20% stake in the company in a primary and secondary share deal in May 2017.
One97 was valued at $10bn as of an investment by private equity firm Berkshire Hathaway in August 2018 that ET reports was $300m in size, and at $16bn in a secondary share deal earlier this year.
Berkshire Hathaway owns a 2.9% stake while growth equity firm and early One97 backer SAIF Partners has 19.5% according to ET. Fabless semiconductor MediaTek is also a backer, having invested $60m in 2016.
Alibaba led a $200m round for Paytm Mall in early 2017, investing alongside SAIF Partners at a $1bn valuation, before it added $400m from SoftBank and $45m from Alibaba in an April 2018 round that valued it at $1.9bn.
