Paytm raises $1 bn from Japan’s SoftBank, China’s Ant Financial; plans to invest Rs 10,000 cr for expansion

In a fresh round of funding, One97 Communications-led Paytm reportedly raised $1 billion at a valuation of $16 billion from new and existing investors, including Japan’s SoftBank Group and China’s Ant Financial, according to a report in Mint. Apart from Ant Financial, an affiliate of Alibaba Group Holding, and SoftBank Vision Fund, new investors including T Rowe Price Associates and Discovery Capital, an existing shareholder of Paytm, also took part in the funding round, the report said. This is the largest amount raised by an Indian startup this year, said a report in The Economic Times. With the latest fundraising, the company’s value has reached close to $16 billion, said the report. [caption id=“attachment_5076101” align=“alignleft” width=“380”]  The headquarters of Paytm digital payments firm in Noida. Reuters[/caption] “It’s a $1 billion raise led by T Rowe Price. SoftBank has pumped in $200 million while Ant Financial has invested $400 million at a $16 billion valuation,” Vijay Shekhar Sharma, CEO of One97 Communications, Paytm’s parent company, was quoted as saying in the report. The country’s top financial technology firm plans to invest Rs 10,000 crore over the next three years in a bid to expand its services in tier-III cities and smaller towns of the country amid rising competing from rival companies like Google Pay, according to a report in Business Standard. When rivals like Google Pay and PhonePe are spending massively on cashbacks, Paytm, which serves merchants in more than 2,000 cities and towns, in 650 districts of the country, said it would use Rs 10,000 crore to add as many small merchants and businesses as possible into its fold, the report said. In August this year, the digital wallet company’s valuation had more than doubled to $15 billion in the latest investment round from about $6 billion in March 2017. The value of Paytm was clocked at $6-billion just before Japanese conglomerate SoftBank had pumped in $1.4 billion (over Rs 9,079 crore) in the Sharma-led company. He is the founder and CEO of One97 Communications, the parent company of Paytm. Digital transactions on rise Digital transactions increased more than five times since 2015 to 22.4 deals per person in the year ended 31 March, according to a Reserve Bank of India (RBI) data. Moreover, the digital payments segment in India has witnessed strong growth post-demonetisation in November 2016. Players like PhonePe, Paytm and others have witnessed strong growth in user base as well as transaction value and volumes. Early this month, Paytm had said it had plans to invest Rs 500 crore in early-stage startups that build complementary technologies augmenting the digital ecosystem. The company said it would focus on artificial intelligence-based technology and big data solutions for new innovations that can generate large scale employment. Paytm had introduced QR code-based payments to enable merchants, irrespective of the size of their business, to receive money directly into their bank account. In May this year, SoftBank had invested about $1.4 billion in Paytm, reported PTI. — With inputs from agencies