SUMMARY
Existing investors T Rowe Price, Alipay, Softbank and others participated in the round
In November, Paytm announced it has raised $1 Bn
The company is now valued at $16 Bn
Noida-headquartered One97 Communications, the parent company of Paytm, has secured latest equity funding of INR 4724 Cr ($669.5 Mn) from its existing investors T Rowe Price, Alipay, SoftBank and others.
According to the Ministry of Corporate Affairs filings accessed by Inc42, the digital payments company, on December 6, 2019 allotted 2,592,472 equity shares at a price range of INR 18150-INR 18230 per share to Alipay Singapore Ecommerce Private Ltd, SVF Panther (Cayman) Ltd, T Rowe Price Growth Stock Fund Inc. and others.
While Alipay Singapore Ecommerce invested INR 1,433.01 Cr, SVF Panther (Cayman) put in INR 1,430 Cr and T Rowe Price has invested INR 1074.9 Cr. Further, Hana Financial Investment has put in INR 107.24 Cr and Samba Financial Group has invested INR 179.04 Cr. Other investors inclue K2VC, DG Holdings etc.
The development comes after Paytm announced in November that it has raised $1 Bn in a financing round led by T Rowe Price. The round also saw participation from existing investors such as Ant Financial and SoftBank Vision Fund, and Discovery Capital. At the time, Paytm founder and CEO Vijay Shekhar Sharma said that Paytm will invest around INR 10,000 Cr ($1.39 Bn) to acquire customers and merchants in smaller towns.
Additionally, Paytm will also spend this money to partner with online merchants as well. “The primary intention is to become more inclusion-centric and provide financial services for the underserved and unserved by leveraging technology as a distribution platform,” Sharma added.
Founded in 2010, Paytm is one of the first digital payment platforms in India. The company enables payments bank, credit cards, UPI for payments and transactions, ecommerce with Paytm Mall, event ticketing services, wealth management, insurance and gold trading. The company is now eyeing public listing in the next few years. Paytm has close to 130 Mn monthly active users and more than 450 Mn registered users, as of July 2019. The platform planned on targeting 250 Mn new customers, and onboard new merchants in Tier 2 and Tier 3 cities and towns.
Sharma has said that the company will start preparations for IPO within two years. Paytm chief said he wants the firm to generate more cash before entering the public market. Later in October 2019, Vikas Garg, deputy CFO, Paytm said that the company’s contribution margin has grown to profit of 12% of the revenue. Garg also said that the company has recorded a gross transaction value (GTV) of $100 Bn, up from GTV of over $50 Bn, while clocking 5.5 Bn transactions in FY19.
However, the company filings for FY19 showed a 2% increase in revenues while its expenses jumped by 54% leading to 2X increase in losses for the year ending March 31, 2019.
The report said that the company’s revenues increased to INR 3050 Cr from INR 2987.41 Cr in FY18. At the same time, the company’s losses went up to INR 3960 Cr in FY19, as against INR 1491.23 Cr in FY18. Further, in terms of expenses, One97 Communications spent INR 7254.8 Cr in FY19, as against INR 4718.5 Cr in FY18.
In the ultra-competitive digital payments industry, Paytm competes with the likes of Google Pay, PhonePe etc.
