Telecommunications and internet group SoftBank invested $1.4bn in One97 Communications, the India-based e-commerce company that owns mobile payment platform Paytm, yesterday.
The round valued One97 at $7bn post-money, two people close to the deal told Livemint, adding that about $400m of the funding was used to buy stock from venture capital firm and early investor SAIF Partners, and One97 founder Vijay Shekhar Sharma.
One97 operates a diversified e-commerce and online services business but it is now best known for Paytm, the mobile payment platform it launched in 2010, which enables users to buy phone credit, pay bills and buy insurance or book travel tickets.
The firm has spoken for a while about formally dividing its e-commerce and financial services businesses. It plans to launch an online financial services offering called Paytm Payments Bank next week, and secured $200m for its Paytm E-Commerce business in March this year.
However, the SoftBank deal was originally announced on Paytm’s blog, which stated explicitly that it had invested in One97, and that One97 is Paytm’s parent company.
The transaction marks the latest part of an ongoing rise in valuation for One97, which was valued at $5bn as recently as August 2016 when it raised $60m from semiconductor producer MediaTek.
China-based e-commerce firm Alibaba and its Ant Financial affiliate increased its stake in One97 to 45% in March this year when it bought 4.5% of the company’s shares from existing investors Reliance Capital, Saama Capital and Sapphire Ventures at a $6bn valuation.
SoftBank will get a board seat along with its equity stake, and now holds substantial shares of almost every large India-based online services company, including ride hailing service Ola, e-commerce firm Snapdeal and short-term accommodation booking platform Oyo.
One97 has now raised a total of about $1.8bn in funding altogether, excluding secondary share purchase deals.