Inc42 Daily Brief
Stay Ahead With Daily News & Analysis on India’s Tech & Startup Economy
After securing a $60 Mn investment from Mediatek last month, Paytm is now reportedly planning to invest $120 Mn- $149Mn (INR 800 Cr – 1000 Cr) to develop its ecommerce business, Paytm E-commerce Pvt. Ltd.
According to an official statement, Paytm’s founder Vijay Shekhar Sharma also plans to invest the new capital into his payments bank venture. The plans are to launch its Beta version by this October. At the same time, the ecommerce sector is an important approach for the company and Paytm plans to push it further to tackle competition in the online retail market.
In August 2015, Paytm received a license from the Reserve Bank of India to set up a payments bank. In April this year, IAMAI appointed Paytm Founder Vijay Shekhar Sharma, as the Chairman of the newly formed Payments Banks Group at IAMAI.
Sharma said, “The latest funding round will take about two months to close but the management has decided our marketplace is a key business for us, and new investors will put in money into the ecommerce entity. We will be able to adequately capitalise our marketplace business with $149 Mn initially.”
In August 2016, One97 Communications which runs Paytm created a new company called Paytm E-Commerce Pvt. Ltd, to which it will transfer the online retail business of the payments and ecommerce platform.
According to documents filed with the Registrar of Companies, the new entity was incorporated on August 1, 2016 and currently lists One97 founder Vijay Shekhar Sharma as the majority shareholder in the firm.
“Creating a new entity for the marketplace will allow us to dedicate a separate team and invite independent shareholders who will put money for this business,” he added.
Noida-based Paytm started out as a mobile payments and recharge business. The company has built its ecommerce marketplace during the last two years by selling apparel, footwear, smartphones, bus tickets, and movie tickets. Paytm is backed by investors including Alipay, Alibaba Group, SAIF Partners, Sapphire Ventures and Silicon Valley Bank.
This development was first reported by ET.
Note: We at Inc42 take our ethics very seriously. More information about it can be found here.