India-based fintech developer Paytm has agreed to the terms for a contribution from telecommunications conglomerate SoftBank’s Vision Fund to a $1bn funding round, the Economic Times reported yesterday.
SoftBank Vision Fund expects the company to go public within five years of the investment and, should this goal not be met, will have the right to sell its shareholding to a third party.
Ant Financial, the financial services affiliate of e-commerce grioup Alibaba, is also thought to be mulling over an investment, as is T. Rowe Price. The latter may supply between $150m and $200m to the round, which as recently as last month was reported to be potentially worth $2bn.
Founded by One97 Communications, Paytm has built a mobile payment app that enables consumers in India to pay for goods in shops, settle utility bills and add credit to their phones.
One97 has also established e-commerce platform Paytm Mall, mutual fund investment platform Paytm Money and consumer credit provider Paytm Postpaid.
Paytm and Paytm Mall have begun raising equity individually, but much of their earlier funding was supplied to One97.
Ant Financial and Alibaba jointly own a 38% stake in One97, while SoftBank holds 19%. The former two acquired the entire shareholding owned by conglomerate Reliance Industries’ Reliance Capital unit in March 2017.
SoftBank injected $1.4bn through a primary and secondary deal in May 2017.
Paytm’s backers also include fabless semiconductor producer MediaTek, which provided $60m in 2016, and private equity firm Berkshire Hathaway, which injected a reported $300m in funding in August 2018, as well as SAIF Partners.
Deep Nishar, senior managing partner at Softbank Vision Fund, revealed to the Economic Times last week that the vehicle had shifted its advice to portfolio companies away from “chasing growth for the sake of growth” and focusing on turning a profit instead.
