One97 Communications, the parent company of Indian e-commerce firm Paytm, is reportedly in advanced talks to raise around $300 to $350 million from MediaTek, Temasek and Goldman Sachs. This new fundraising will value to company at around $5 billion.
As per the report from LiveMint, citing two people aware of the matter, existing investors of the company — Alibaba Group and SAIF Partners, will also participated in this round. Along with them, Foxconn and GIC are also likely to take part.
Once MediaTek invests in Paytm, the chipset-making company will help the company by pre-bundling the Paytm application on devices powered by MediaTek’s processor. MediaTek roughly covers around 35% of the Indian market, ahead of Qualcomm.
The startup has recently formed a new entity called Paytm E-Commerce Pvt. Ltd. and will soon spin-off its online retail business into this new entity. It has also spun-off its payment business into a different entity.
One97’s payments business, called Paytm Payments Banks, is scheduled to launch by the end of October this year. The company has already made key hires.
China’s Alibaba holds a significant stake in Paytm. It is expecting the company to dominate the payments business — online as well as offline, on back of its marketplace business. Last year, Alibaba and its finance arm — Ant Financials, invested less than $1 billion in the company.
Paytm, which was started as an online recharge portal by Vijay Shekhar Sharma, is today among the top three consumer Internet company of India. With close to Rs. 2,000 crore in GMV in the month of July, it sits just next to Flipkart and Amazon in India.
Earlier this month, Vijay Sharma had revealed that the company has set a target of reaching GMV of Rs.3,000-3,500 crore by December this year. For the fiscal year 2016, the company had posted a loss after tax of Rs.1,534 crore.
The company’s digital wallet service — Paytm Wallet, is currently dominating the digital wallet market. Its compititors in this space includes FreeCharge, MobiKwik, Oxigen, among others.