Noida-based mobile payment services firm, Paytm has obtained the nod of its board to raise $375 Mn from an affiliate of its present investor, Alibaba Group as it has exceeded the performance targets set by the investor for disbursal of funds.
The current fund raising puts the valuation of the online payments processor at $1.83 Bn. Post this round of funding, Paytm finds a place among the most valued startups in the Indian ecommerce space, next to online retailers Flipkart and Snapdeal and cab aggregator OlaCabs. The fresh round of funding can be seen as the part of Paytm’s plans to enter the ecommerce sector.
As per the reports, Paytm is likely to receive the additional capital within the next six months. This move will increase Alibaba unit Ant Financial Services’ stake in the company to 41%.
The documents filed by Paytm with the registrar of companies (RoC) says, the allotment of shares in the latest tranche of fund-raising needs to be completed within 12 months of the board passing the resolution approving it. The deal is subject to approval by Ant Financial.
It further states that, Alipay Singapore Ecommerce Pvt. Ltd has already infused $200 Mn into Paytm in two tranches of $65 Mn and $135 Mn for a stake of 25.88%. Besides, it also received close to INR 1 Cr from Ratan Tata’s personal investment firm RNT Associates Pvt. Ltd.
It is to be noted that Alibaba had changed the name of Alipay financial services to Ant Financial Services Group in October last year.
However, Paytm did not comment on the deal. Co-founder Vijay Shekhar Sharma said, “We see a long-term partner in Alipay and together we are aiming to get a dominating market share in the mobile payments and commerce space.”
Founded in 2010, Paytm is owned-by One97 Communications Ltd, and presently offers a marketplace for mobile applications including mobile recharge, utility bill payments and inter-wallet and wallet-to-bank money transfers. The company has around 66 Mn wallets on its platform which it further plans to take to 100 Mn by the end of this year.
It has 30,000 merchants on its platform and is expecting to touch close to 100,000 by the year-end after it allows zero-commission listings. Paytm is also backed by venture capital firm SAIF Partners, which currently holds close to a 37% stake in the company.
Recently, it had also launched a dedicated app for sellers to connect small businesses and consumers, which will work on zero commission model and also entered into a strategic tie-up with Alibaba to list 100 Mn stock-keeping-units (SKU) on Paytm platform by this month. Besides, Government-owned railway ticketing platform IRCTC has also added Paytm’s wallet as an online payment option.