Telecommunications group SoftBank is in talks to invest in One97 Communications, the India-based e-commerce company that owns payment platform Paytm, the Economic Times and Livemint reported today, each citing three people familiar with the matter.
The purported investment would be between $1.2bn and $1.5bn at a valuation of $7bn to $9bn, according to Livemint, though ET reports that One97 is seeking between $1.4bn and $1.9bn at an $8bn valuation.
One97 provides a range of online and e-commerce services but is best known for Paytm, the mobile payment platform that offers options ranging from bill and utility payments to travel and event booking.
The company plans in the next few months to finalise a formal divide between its e-commerce and mobile payment operations into separate companies that will be known as Paytm E-Commerce and Paytm Payments Bank respectively.
SoftBank intends to acquire a 20% stake in One97 according to ET, which would suggest any transaction will take place prior to the split. One of its sources told the newspaper that deal is still a few months away, and that SoftBank wants to first close a merger between portfolio company Snapdeal and rival Flipkart.
The corporate would buy shares in One97 from venture capital firm SAIF Partners and One97 founder Vijay Shekhar Sharma as well as investing directly in the company, a source told Livemint.
The deal would give Japan-headquartered SoftBank a stake in India’s financial services sector as Paytm, which has secured a banking licence, aims to significantly boost the range of financial services it offers.
The funding would also reduce the influence of China-based e-commerce group Alibaba, which along with its financial services affiliate Ant Financial reportedly owned about 46% of One97 as of March this year when it invested $250m at a reported $5.9bn valuation.
Alibaba and Ant Financial had reportedly already supplied more than $800m in funding across deals in February and September 2015. Fabless semiconductor producer MediaTek is a minor investor, having provided $60m for One97 in September 2016.