Paytm on Thursday said that it has raised $1.4 billion from Janpanese investor SoftBank Group Corp. Following this, SoftBank joins Alibaba Group as a major shareholder and will take a seat on the Paytm board. SoftBank’s investment in One97 Communications, the parent company of Paytm would value Paytm at about $7 billion. In August 2016, Paytm had mopped up $60 million from Taiwan-based chip maker MediaTek Inc at a valuation of about $5 billion.
“This investment by Softbank and support of the incredible entrepreneur Masa Son is a great endorsement of our team’s execution and vision. We believe we have a great opportunity to bring financial inclusion to half a billion Indians,” said Vijay Shekhar Sharma, founder and CEO of Paytm. “Paytm plans to invest `10,000 crore over the next three to five years towards its commitment to enabling half a billion Indians to join the mainstream economy,” the statement added. Speaking to reporters, Sharma said that Paytm has invested $500 million in its financial services which includes its payments business,in the last two years.
Masayoshi Son, chairman and CEO, SoftBank Group added, “In line with the Indian government’s vision to promote digital inclusion, we are committed to transforming the lives of hundreds of millions of Indian consumers and merchants by providing them digital access to a broad array of financial services, including mobile payments.” Further expanding its play in the financial services segment, Paytm announced that it has bagged the final approval for Paytm Payments Bank from RBI and will begin operation from May 23.
“India has presented us with the world’s largest opportunity in terms of financial services and we are confident its market will grow exponentially over the next decade. We are proud to be Paytm’s strategic partner and we will continue to extend our tech know-how to support Paytm’s growth in the country. We welcome SoftBank to a great ride together to provide equal access to financial services in India,” said Eric Jing, CEO, Ant Financial. According to Sharma, the company clocked gross merchadise value of $5 billion in FY17 from 1.5 billion transaction during the year and is targetting between 4-4.5 billion transactions for the current fiscal year. The company claims to have 220 million wallet users and 5 million merchants of its platform.