After roping in China’s Alibaba as an investor into its marketplace business unit, India’s leading mobile wallet and payments company Paytm is reportedly in talks to raise over $1 billion from the Japanese investor SoftBank, which is widely believed to be readying for selling its stake in another e-commerce firm Snapdeal.
The deal, if successful, will raise Paytm’s valuation at over $7 billion from $5 billion last year when it raised $60 million from Mediatek, PTI reported citing ‘multiple’ unidentified sources. As part of the deal with Softbank, Paytm may also buy Snapdeal-owned payments firm Freecharge, PTI said.
Indian e-commerce space is abuzz with news reports that the largest player Flipkart is considering acquiring Snapdeal, especially since the latter’s largest shareholder Softbank is keen to exit the investment and is expected to make an announcement in the next few weeks.
Earlier last month, Chinese e-commerce giant Alibaba, which was widely tipped to be eyeing an entry into India for a long time, picked up a significant equity stake in the newly-formed marketplace business Paytm, at a time when the incumbents in the country are reeling under operational pressures leading to retrenchments and cut in valuations.
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Alibaba’s $177 million investment in Paytm Mall, along with $23 million by the private equity player SAIF Partners, is sure to pit it against Amazon India, Flipkart, Snapdeal, Shopclues and others, making it one among the most prominent players in the fast-crowding Indian e-commerce industry.
Meanwhile, Flipkart too recently pulled a coup by buying Indian business of the eBay Inc, as part of an exercise to raise $1.4 billion — its single-largest to date — from a consortium of Tencent, Microsoft and eBay. As part of the agreement, eBay Inc will pay $500 million in cash and will transfer ownership of eBay.in to Flipkart, in exchange for an unspecified equity stake in the company.
The proposed new funding from Softbank will help Paytm accelerate expansion ahead of the launch of its payments bank service, PTI reported. Paytm has seen manifold growth in transactions on its platform after the government scrapped high denomination notes in November last year.