Retail in Asia

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Paytm to raise $300 million, valuation likely to hit $5 bn

One97 Communications, which runs mobile payment and e-commerce platform Paytm, is in advanced talks to raise fresh funding of about Rs 2,000 crore ($300 million) as the company gears up to launch the payments bank and aims to boost its e-commerce business, according to several media reports citing sources.

The deal, which is expected to close in 30-60 days, will value Paytm at about $5 billion, more than double its last reported valuation of $2 billion in May 2015, reports say.

The investors involved in the fund raising include global financial services major Goldman Sachs, Singapore’s Temasek and semiconductor maker MediaTek. Existing investors such as Chinese e-commerce giant Alibaba and its arm Alipay are also taking part.

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Once completed, the Paytm transaction will be the largest funding round of any start-up in India this year. The development comes at a time when large Indian startups are struggling to raise fresh capital at valuations higher than in their last rounds.

Paytm recently separated its commerce business from the payments business as its key investor Alibaba Group Holding Ltd firms up plans to enter India either independently or through an acquisition.

One97 has already created a new entity called Paytm E-Commerce Pvt. The new entity was incorporated on 16 August and Paytm founder Vijay Shekhar Sharma has also incorporated Paytm Payments Bank Limited as a separate entity, documents filed with the Registrar of Companies show.

The new company shares a common address with One97’s Delhi office. Chinese internet giant Alibaba and its affiliate Ant Financial are the largest stakeholders, at 40 per cent, having invested $680 million in One97.

(Source: India Retailing)