As Paytm looks to take on other payment giants and solidify its diversified financial services platform, Swiss multinational investment bank UBS Group AG is in reportedly close to investing $400 Mn in the fintech giant.
Paytm, which is valued at $16 Bn after its last funding round in 2019 led by TP Rowe, has Softbank, Alibaba’s Ant Group and other institutional investors on its cap table, but the new round could see employees sell their stake, according to a Bloomberg report. The company would not be raising fresh capital as part of the round and UBS’ investment fund is likely to back Paytm along with some of its partners and clients, the publication added.
Last month, Paytm dismissed speculation that Ant Group is considering selling its 30% stake in the Indian digital payment giant amid border tensions and a toughening policy check in place. The Chinese financial giant has not launched a formal sale process yet, but the speculated UBS Group round could be part of this process. Paytm did not respond to the report on the UBS investment.
The main trigger for the stake to consider the divestment of its stake in Paytm is the worsening diplomatic relations between India and China in the past few months. In recent times, India has also toughened its FDI norms and tightened vigil over investments from its neighbours especially China. The Indian government has also banned 220 Chinese apps with the prospects of that number likely to go up soon.
Recently, announcing its financials, Paytm revealed that it had managed to increase its revenues to INR 3,629 Cr with 40% reduction in losses in the financial year 2020, ending March.
In the financial year 2019, the company had recorded a loss of INR 4,217.20 Cr on a consolidated basis and INR 3,232.01 Cr in revenue. It had also bared expenses worth INR 7,730 Cr in FY19 versus INR 4,864 Cr in FY18. The company’s debt levels had also increased to INR 695.4 Cr in the same period.