One97 Communications, Parent company of Indian payment and e-commerce company Paytm, is set to acquiring the funding of more than Rs 12,000 crore ($1.9 billion) from SoftBank, Japanese media and telecom conglomerate through a single funding round which will be the largest funding round for an Indian ecommerce company.
Deal valued the company at $9 Bn
This deal will evaluate the company at almost $9 billion on the behalf of 20% stake to SoftBank. A person who is familiar with the deal cited about the deal in their statement that, “The deal was agreed on earlier this week and is now waiting for board approval”.
Paytm has gained funds from MediaTek
Almost eight months ago, Paytm has raised a funding from MediaTek, Taiwanese semiconductor maker company, and that deal had evaluated the company at $4.8 billion.
Founder hopes to extend the payment business
Vijay Shekhar Sharma, founder of the company and owner of the license for One 97 payment bank, is planning to allocate $1 billion for extending the payment business in to high developed areas like insurance and lending.
Company looks to extend its business towards offline
Recently, company also established a different subsidiary named Paytm Financial services. Apart from this, company is also seeking to extend its business towards offline. Well the payment bank operations are aligned in the queue of final regulatory approval.
Competition becomes intense with funding
Earlier it was already revealed about the other funding raised by the Paytm and others.
It is said that Paytm is about to acquires a fund of $1.4 to $1.9 million from Softbank that will evaluate the company at $8-9 billion.
Also it comes to notice that Flipkart joins hands with Tenscent, eBay, and Microsoft to raise $1.4 billion which will evaluate the company at $11.6 billion.
All in all, the total investment of Softbank in India will get doubled after the Paytm funding.
SoftBank has invested $2 Bn till now
SoftBank, the Masayoshi Son led group has invested approximately $2 billion till date in the Indian market which includes Indian cab service provider Ola, e-commerce space Snapdeal, hotel business OYO and Grofers.
SoftBank interested in Snapdeal and Freecharge sale
It was also mentioned earlier that the Japanese investor, SoftBank has configured an investment fund of $100 billion and is also about to sell Snapdeal to Flipkart which would be its largest investment in India and this is a result of rift in the board of Snapdeal.
Furthermore, it is intended to put investment in consolidated entity. In fact it is also intended to sell the e-wallet Freecharge, owned by Snapdeal.
Paytm Vs MobikWik
As per Paytm’s Sharma, who was recently counted as one of the TIME’s ‘100 Most Influential People’ list, Paytm has seen a triple growth in transactions with almost $1.5 billion during the financial year 2017. The organization has more than 200 million wallet clients which is more than twofold the size of its strongest contenders like MobikWik.
Paytm and other rivals
The new funding round will prepare Paytm best for the competition with its rivals like whatsapp and Phonepe. Phonepe is a payment subsidiary of Flipkart and it is working with the Tencent after gaining the fresh round of funding.
Other contenders can also show their impacts in the competition like Truecaller and Reliance Jio other than incumbent bank.