Paytm, the leading payments platform and digital wallet service provider in India, is raising a new funding round worth $200 million. In this new round, Alibaba Group Holding will invest $177 million, while the remaining amount will be invested by SAIF Partners.
The new funding deal is expected to value the Paytm E-Commerce at close to $1 billion. However, the company has not revealed any valuation details yet.
The investment is said to be for the e-commerce unit of Paytm. This was revealed through the documents filed by the company with the Registrar of Companies. However, reports stating $200 million funding round from Alibaba were making rounds since February.
With this new investment, Alibaba Singapore E-Commerce will have a shareholding of 36.31% in Paytm E-commerce, while SAIF Partners India will own 4.66%. The investment is expected to pave way for the much-awaited entry of Alibaba into India. Alibaba will go head-on-head with homegrown e-commerce firm Flipkart and global e-commerce leader Amazon.
Earlier this week, Paytm launched a separate smartphone application and website —Paytm Mall— an online marketplace platform. Last year, the company registered a separate entity to spin-off its e-commerce division. Now, the company is aggressively hiring people for expanding the operations.
After spinning off its operations in different entities, One97 Communications now has three units — Paytm E-Commerce, Paytm Payments Bank and Paytm Mobile Solutions. It is soon going to launch its payments bank service in India.
One97 Communications, the parent company of Paytm, was valued at $4.6 billion in August 2016 when it raised $60 million from MediaTek Inc’s Mountain Capital fund. Till now, the company has raised funding of more than $585 million.