SoftBank opens up wallet for Paytm; infuses Rs 9K crore

Ivan Schwartz
May 20, 2017

Paytm has announced an investment of USA $1.4 billion by the SoftBank Group, the Japanese Internet and telecom major, in One97 Communications Limited, the entity that operates India's largest mobile payments and commerce platform under the Paytm brand.

Paytm founder and CEO Vijay Shekhar Sharma said: "This investment by SoftBank and support of the incredible entrepreneur Masa Son is a great endorsement of our team's execution and vision". Livemint, citing anonymous sources associated with the deal, has reported that SoftBank has taken a stake of about 20% in Paytm with the investment.

Paytm is eyeing to invest about $1.6 billion over the coming 3-5 years towards enabling half-a-billion Indians to join the mainstream economy, the company informed on Thursday.

The company will receive the investment from SoftBank in One97 Communications that operates Paytm's mobile wallet business and payments bank business which is set to be launched on May 23.

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"We are at an inflection point in our journey with Paytm".

SoftBank's wager on Paytm comes at a time when it is consolidating its India bets and putting its weight behind category leaders in the cash-guzzling consumer internet sector. "We believe we have a great opportunity to bring financial inclusion to half a billion Indians,".

The company further added: "We have been going from strength to strength in our payments division". There has also been a significant uptake in its movie ticketing, and travel booking (rail, bus and flight tickets) businesses.

Paytm announced in February that it has now has over 200 million users of its mobile wallet, which is a popular payment method in India. That increased to $6bn in March 2016 when Alibaba Group and Ant Financial Services Group bought a combined stake of almost 4.3% from three Paytm investors Reliance Capital, SVB and SAP Ventures. Prior to this round, the payments firm, which started life as mobile value added service delivery platform in 2000, raised $60 million from Taiwan's Mediatek at a $4.8 billion valuation in August a year ago. And also for the grow its user base and introduce more financial products for consumers. Even as SoftBank backs Paytm, the Masayoshi Son- led internet and telecoms conglomerate, which has ploughed around $2 billion in the country over the past few years across startups like Ola, Grofers and Oyo Rooms, is finalising a deal to sell its once-prized portfolio company e-commerce marketplace Snapdeal to Flipkart in a cut-price deal. Accel Partners is an early investor in Flipkart.

Other reports by GizPress

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