Paytm nears $2-bn funding from Softbank, Ant and others

Fintech major Paytm is close to scoring $2 billion of financing from investors, including Jack Ma’s Ant Financial and Japan’s Softbank Group Corp, to fend off an influx of new rivals, a person familiar with the matter said.

The funding will be split evenly between equity and debt and values the country ’s top online financial services firm at $16 billion, the person said, asking not to be identified talking about a private deal.

The talks are in their final stages but the terms could still change, the person added. If a deal is finalised, Paytm could outstrip fellow high-profile Asian start-ups such as Grab and Gojek in valuation.

Paytm founder Vijay Shekhar Sharma is raising capital to protect the start-up’s share of a potentially $1-trillion payments market from new entrants, including Facebook, Alphabet’s Google and Flipkart’s Phonepe. Over the past year, a string of new apps have made payments easy, bringing discounts and cash bonuses to young, smartphone-savvy users.

Credit Suisse Group now estimates that the Indian digital payments market will touch $1 trillion by 2023 from about $200 billion currently. It's a market with huge potential: Cash still accounts for 70 per cent of all Indian transactions by value, according to Credit Suisse, and China is far more advanced with a mobile payments market worth more than $5 trillion.

Paytm, which is also backed by Alibaba Group Holding, declined to comment in response to emailed questions. Softbank wasn't immediately available for comment during a Japanese national holiday. Ant had no immediate comment when contacted.