Ant Financial Services Group, an online financial services company operated by Alipay (a unit of Chinese e-commerce giant Alibaba Group) has agreed to acquire 25 per cent stake equity in Indian mobile internet firm One97 Communications, which operates under the brand Paytm, a mobile payment and m-commerce platform.

The transaction details remain undisclosed.

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Paytm will use the funds to grow its mobile payment ecosystem and further boost its commerce user base, the company shared in a press statement.

The deal marks Ant Financial’s entry into India, one of the fastest-growing e-commerce markets in the world. With this investment, Ant Financial will provide Paytm with strategic and technical support for its business.

“With over one billion people, India’s payments market has vast untapped potential,” said Cyril Han, Vice President of Ant Financial. “As smartphone use continues to rise in India, we see great opportunity in the mobile wallet space and Paytm is best equipped to build a mobile payments ecosystem in the country.”

Set up in 2000, One97 offers digital goods and services to its mobile consumers under the Paytm brand.

Paytm started by providing mobile recharge and utility bill payments and today it offers a full marketplace to consumers on its mobile apps. The firm claims to facilitate nearly 25 million orders per month, and its mobile wallet is used by more than 23 million users to pay for various services.

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Additionally, One97 also provides mobile advertising, marketing and payments to merchants. The firm runs an early-stage mobile fund called One97 Mobility Fund.

One97 counts among its key investors VC funds including SAIF Partners, Intel Capital, Sapphire Ventures, Saama Capital and Silicon Valley Bank.

Ant Financial is an online payment and financial services company in China that is focussed on serving small and micro enterprises and consumers. It also runs Alipay Wallet, which has over 190 million users in the country. Other businesses operated by Ant Financial include Yu’e Bao, Zhao Cai Bao, Ant Micro Loan and Sesame Credit.

Paytm mainly faces competition from horizontal e-commerce companies such as Flipkart, Snapdeal and Amazon in India.

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