Paytm readys for a possible US$500mn cash infusion

Paytm's parent company, One97 Communications restructures ahead of new rounds of investor funding and Alibaba's further entry into India.

Inc42 reported Monday that the India-based Alibaba-backed firm, Paytm is set to raise US$300mn (over Rs 2,000 crore) in a round of fresh funding from a clutch of investors at Taiwanese semiconductor maker MediaTek, Goldman Sachs, and others. The round of funding is said to likely take Paytm’s valuation to ~US$5bn, up from an earlier valuation of US$2.5bn.

Fund investors
According to unnamed sources, Paytm will announce the deal in the next few weeks. The financing round is also expected to see participation of existing investors, Alibaba and its payments affiliate Alipay as well as venture capital firm SAIF Partners who previously funded the company’s US$500mn round in Jan. 2015.

Earmarked use
Unnamed sources indicated the new fund infusion will be deployed across Paytm’s three verticals — digital payments, e-commerce, and a planned payments bank (Patym e-commerce ). The latter is the company’s most recent venture, having announced last July that it would begin lending to its small business clients as part of an effort to expand into a digital bank.

Entry channels
One97 Communications, Paytm’s by parent company, separated its e-commerce business to form Paytm E-commerce Pvt. Ltd. earlier this month. Inc42 reports the restructuring allows the new company to raise funds just for its e-commerce operations and is expected to become the launchpad for Alibaba's online operations in India. Alibaba’s company's business-to-consumer site Tmall is expected to make its India debut in six months.

Tags: News, payments

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