Japan’s SoftBank Group is in talks with One97 Communications to invest around $1.4 billion in its mobile payments company, Paytm, sources aware of the development said. If the talks materialise then Paytm’s valuation would increase to around $7 billion. Paytm was last valued at around $5 billion when it raised funds in August 2016 from Taiwan-based chip maker MediaTek.
Paytm is currently the country’s largest digital-payments provider and saw a huge surge in its user base in the aftermath of demonetisation in November 2016. If SoftBank, which already has investments in homegrown firms like Snapdeal, Ola and Oyo Rooms, now invests in Paytm then it would underline the company’s bullishness on the country’s e-commerce story.
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The move will also come at a time when several e-commerce companies are either folding up or merging with bigger players for survival. Talks are already on for Snapdeal’s merger with Flipkart. SoftBank did not officially comment whether it is planning to invest in Paytm. Currently, Chinese e-commerce major Alibaba is the largest investor in Paytm. Other major investors include SAIF Partners, Sapphire Venture, Silicon Valley Bank and K2 Global.
Vijay Shekhar Sharma, founder and CEO of Paytm, has earlier said in the last two years, the company has invested $500 million in its financial services which includes its payments business and is targeting an investment of R10,000 crore over the course of next three years in financial services.
According to Sharma, the company clocked a gross merchadise value of $5 billion in FY17 from 1.5 billion transaction during the year and is targeting between 4-4.5 billion transactions during the current fiscal year. As on March 2017, the company has 218 million wallet users and 5 million merchants on its platform.