Paytm raises $1.4 billion in fresh funds from SoftBank
Paytm plans to invest $1.6 billion in India over the next 3 to 5 years
Paytm has raised $1.4 billion from SoftBank Group Corp. in the largest funding round by a single investor in India, making the digital payments firm the Japanese company’s biggest bet in India’s start-up ecosystem.
The deal includes $400 million worth of shares that SoftBank will buy largely from Paytm’s early investor SAIF Partners in a secondary transaction, and a minor stake from founder Vijay Shekhar Sharma, according to two persons close to the development.
The deal values the company at about $7 billion post-money (including the investment) and will take SoftBank’s stake to about 20%, the two people said, requesting anonymity.
SoftBank, SAIF and Paytm did not comment on the valuation or secondary sale.
In August 2016, Paytm’s owner One97 Communications Ltd was valued at about $5 billion when the company raised $60 million from MediaTek Inc.
Its valuation soared to $6 billion in March when three existing investors—Reliance Capital, SVB (Saama Capital) and SAP Ventures—sold their combined stake of about 4.3% to Alibaba Group Holdings Ltd and Ant Financial Services Group.
SoftBank, which has not seen too many successful investments in its India portfolio, is now banking on Paytm’s financial services business to replicate Alipay’s (Alibaba Group’s financial business) success in China.
“In line with the Indian government’s vision to promote digital inclusion, we are committed to transforming the lives of hundreds of millions of Indian consumers and merchants by providing them digital access to a broad array of financial services, including mobile payments,” said Masayoshi Son, chairman and chief executive officer of SoftBank Group.
Mint first reported on SoftBank’s likely investment in the Indian fintech start-up earlier on April 19.
Paytm plans to invest about $1.6 billion (around ₹10,000 crore) over the next 3-5 years towards enabling half-a-billion Indians to join the mainstream economy, the company said in a statement on Thursday.