Tata adds Paytm to e-trade kitty

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Bengaluru | Published: March 14, 2015 1:28:15 AM

Ratan Tata’s tryst with India’s consumer internet space continues. The Tata Sons chairman emeritus has now thrown his weight behind Paytm...

Ratan Tata’s tryst with India’s consumer internet space continues. The Tata Sons chairman emeritus has now thrown his weight behind Paytm.

The 76-year-old has made an undisclosed investment in the mobile payments and commerce platform and will take up an advisory role, marking his fifth investment in the local e-commerce sector.

Including Paytm, Tata has now invested in five home-grown consumer internet companies in the last seven months. He had invested in online marketplace Snapdeal last August, followed by jewellery e-tailer Bluestone in September, online furniture store Urban Ladder in November and auto classifieds portal CarDekho in February. The veteran had also taken up an advisory role at venture capital firm Kalaari Capital, reflecting the surge in interest among the old guard of India Inc in the domestic consumer internet landscape.

“I am very happy that Ratan Tata has put faith and trust in our values and mission. There is no better adviser for Paytm on building India’s most trusted mobile payment and commerce platform,” Vijay Shekhar Sharma, founder and CEO of One97 Communications, the parent company of Paytm, said in a statement.

Flush with funds, having raised about $575 million from Chinese e-commerce major Alibaba affiliate Ant Financial Services against a 25% stake, Paytm plans to achieve a gross merchandise value of $4 billion next fiscal, up from the present $1 billion. It has SAIF Partners, Intel Capital and SAP Ventures among other investors. Sharma and SAIF Partners, which has so far invested about $70 million in the company, continue to remain majority shareholders.

Incidentally, two stalwarts of the Indian IT services industry, Wipro’s Azim Premji and Infosys’ NR Narayana Murthy, had also thrown their hats in the e-commerce ring. Murthy’s private investment firm Catamaran Ventures had announced in June last year a joint venture with global e-commerce major Amazon, named Taurus Business and Trade Services, where Catamaran will hold a 51% stake and Amazon the rest. Besides being an investor in New Delhi-based Snapdeal, Premji led a $50-million investment through his family office, Premji Invest, in online fashion retailer Myntra, which was later acquired by Flipkart.

“We want to remove middlemen from the ecosystem. Often small merchants, constrained to resort to middlemen to sell goods, end up losing money to them,” Sharma had told FE earlier. Paytm will also start working with financial institutions to secure loans for the merchants, besides developing credit rating mechanisms.

Other than facilitating a mobile commerce platform, Paytm deals in mobile recharge, tickets and deals. It has tied up with the likes of taxi-hailing app Uber, ticket booking portal Bookmyshow, travel booking platform MakeMyTrip and food ordering service Foodpanda, among others. The company also claims to have 25 million active mobile wallet users, with an average wallet balance of Rs 150. It also facilitates 1 million daily transactions across the Paytm app and other merchants.

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