Paytm is amid raising $1.5-2 billion from its existing investors SoftBank Vision Fund and Alibaba’s financial arm – Ant Financial, said people having knowledge of this matter.
The latest financing round at One97 Communications, the parent body of Paytm, is likely to elevate the company’s valuation at $16-18 billion, these people said. These people added that new investors may join the current round.
Considered these valuations, Paytm is likely to see a spike in the $10 billion valuations. This was when Warren Buffett led Berkshire Hathaway invested $300 million in 2018. Sources revealed that Paytm was valued at $16 billion in a second round a few months ago.
To quote a source, “While SoftBank and Ant Financial capital are already in, the company is engaging with other investors and may look to take the round to as much as $2 billion. But it is most likely to be an internal round.”
Stakes so Far
SoftBank invested in the company first holds a 19% stake. The Alibaba group, through Ant Financial and Alibaba directly owns 38% of One97 Communications.
Paytm achieved more than 221 million transactions on the Unified Payments Interface (UPI) last month. Its competitors like Google Pay and Phone Pe’s transactions are estimated at 180-190 million each. PhonePe is likely to raise $ 1 billion after being hived from Flipkart.
A renowned investor commented, “The payments battle in India is a global one with deep-pocketed players in the fray and Paytm investors understand that if they don’t double down now they may lag behind. Currently, Paytm has shown market leadership but the lead needs to be maintained, which is why the capital raise is important.”
This investor further said, Ant Financial that runs ‘Alipay’ will value Paytm at least 20% higher than at the last funding round.
Plus Points for Paytm
Cashback and subsidies have helped driver online payment transactions on the consumer side, with incentives to encourage adoption by merchants. Paytm is also striving to explore other products as Paytm Postpaid, its pay later option. It has also floated Paytm Money, a platform for selling mutual funds.
All points collaborated, it might be very well said that the days ahead are happy for Paytm.
With excerpts from ET Tech.