Paytm Valuation To Hit $18 Bn With Top Up From SoftBank, Ant Financial

Digital payment company Paytm is reportedly in the middle of raising around $1.5 Bn – $2 Bn from its existing investors SoftBank Vision Fund and Alibaba’s Ant Financial, according to a news report.

Citing sources, an ET report said that following this funding round, the company may be valued between $16 Bn – $18 Bn. According to the report, the capital from both SoftBank and Ant Financial is already in, however, the digital payment company is in talks with other investors to take the round to $2 Bn. The round is most likely to be an internal round with investments expected from existing investors.

Prior to this round, the company had raised an undisclosed amount from US-based investment firm Berkshire Hathaway.

In 2017, the Japanese technical conglomerate SoftBank invested in Paytm for the first time. During that time, Paytm had raised $1.4 Bn funding from the SoftBank Group. Currently, SoftBank owns a 19% stake in the company while Alibaba controls 38% stake of PAytm’s parent company One97 Communications.

This round of funding is important at a time when the digital payment space is witnessing a close competition among the three dominant players, Paytm, PhonePe and Google Pay.

The competition is set to become tougher as recently it was also reported that Flipkart has given in-principal approval to its online payment subsidiary PhonePe to be set up as a separate entity. Following this, PhonePe will be allowed to set up an independent board and raise fresh funding from external investors.

As of January 2019, Paytm recorded 221 Mn transactions while PhonePe and Google Pay clocked nearly 220 Mn transactions each.

Earlier in March, it was also reported that government-backed instant real time payment system Unified Payments Interface (UPI) had clocked in 674.19 Mn transactions in February 2019.

To catch up with Paytm, Google Pay is planning to introduce Gold-backed investment plans for its users. Though the feature is yet to be formally announced, an updated clause in the company’s terms and conditions page, spotted by data platform Paper.vc, had tipped off users about Google’s plans. Meanwhile, PhonePe also raised INR 743.5 Cr ($107.6 Mn) from its Singapore-based parent entity PhonePe Pvt Ltd, to bulk up its cash position as it is an official co-sponsor for the TV broadcast of VIVO IPL 2019.

Not only online, but GPay is also looking to strengthen its footprint in the offline payment market. The company is now pilot testing a service which will allow users to transfer money using unified payments interface (UPI) even while purchasing offline.