Fintech major Paytm is in the middle of raising $1.5-2 billion from its existing investors including SoftBank Vision Fund and Alibaba’s financial affiliate Ant Financial, as per industry sources.
The new financing round for One97 Communications, the parent company of Paytm is expected to take the valuation of the company to $16-$18 billion as per industry experts.
“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,” said a person aware of the development.
SoftBank’s first investment move in Paytm came in 2017 in the which the former acquired 19 per cent stake. The Alibaba group via Ant Financial and Alibaba directly owns 38 per cent of One97 Communications.
Amid an increasing competition in the online payment segment, Paytm is eyeing a revamping of its operations as giants like Amazon and Google race to gain a significant market share in the vertical.
Paytm registered 221 million-plus transactions on the Unified Payments Interface (UPI) in the month of February. Another online payment player, PhonePe which is owned by Flipkart is gearing up to raise $1 billion which is expected to further make the competition intense.
“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,” as per an investor.
The latest fundraising initiative comes as the e-commerce business of Paytm struggles with dwindling revenues.
