Putting an end to a month-long speculation, Indian mobile payments and e-commerce brand Paytm today announced that it has received US$1.4 billion in fresh investment from Japanese internet and telecom behemoth SoftBank Group.
The funding comes barely two months after Paytm, owned and operated by Noida-based One97 Communications, secured US$200 million from Alibaba Group. The SoftBank deal will give Paytm enough war-chest to take on Amazon and Flipkart, which recently raised US$1.4 billion and acquired eBay, and is currently on course to merging with Snapdeal.
Paytm plans to use the fresh capital for growth, to expand its user base and build a suite of financial services products for users. It will invest approximately US$1.6 billion over the next three to five years to bring half a billion Indians to the mainstream economy.
As a part of this vision, it will soon launch the Paytm Payments Bank, a mobile-first product that plans to reach every corner of the nation, and focus on the millions of unserved and under-served Indians.
Speaking on the occasion, Paytm Founder & CEO Vijay Shekhar Sharma said: “We are at an inflection point in our journey with Paytm. This investment by SoftBank and support of the incredible entrepreneur Masayoshi Son (Chairman & CEO of SoftBank Group) is a great endorsement of our team’s execution and vision.We believe we have a great opportunity to bring financial inclusion to half a billion Indians.”
Son said: “In line with the Indian government’s vision to promote digital inclusion, we are committed to transforming the lives of hundreds of millions of Indian consumers and merchants by providing them digital access to a broad array of financial services, including mobile payments. We are excited to partner with Paytm in this journey and will provide them with all our support.”
Founded in 2008, Paytm has been a key player in the e-commerce and payments segments in India. Started off as a mobile recharge company, Paytm later expanded into digital commerce space. To date, Paytm has raised close to US$1 billion in total funding from the likes of SAIF Partners, Sapphire Venture and Silicon Valley Bank, and well-known industrialist Ratan Tata. A few months ago, the company launched its payments bank, which can accept deposits from individuals and small businesses of up to INR 1 lakh (US$1,500) per account.
Paytm recently invested US$90 million to enable merchants across India for acceptance of digital payments using its QR code-based payment solution. It claims that this solution has been adopted by millions of merchants. In addition, it also offers Paytm Wallet, which has over 220 million users.
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