One97 Communications Ltd, which runs mobile wallet and e-commerce venture Paytm, has raised an undisclosed amount in a fresh round of funding from NYSE-listed Alibaba Group Holding Ltd and existing investor Ant Financial.
Ant Financial, a privately owned group firm controlled by Alibaba founder Jack Ma, had initially invested in Paytm in February along with SAIF Partners.
Noida-based One97 said in a statement that Alibaba and Ant Financial are making a 'strategic' investment. It didn't disclose any financial details.
Alibaba owns a string of e-commerce properties in China and is the largest online and mobile commerce company in the world in terms of gross merchandise value. Ant Financial runs Alipay, a mobile payments wallet like Paytm. Alipay wallet has more than 190 million users.
Ant Financial had acquired a 25 per cent stake in One97 in February this year. It had not disclosed the deal value then either.
But as first reported by VCCircle, Paytm had inked a deal to raise $575 million from Alibaba and Ant Financial. This was in addition to $60 million more from existing lead investor SAIF Partners. The deal valued One97 around $1.5 billion pre-money, or just over $2 billion post-money. The latest announcement marks a culmination of the proposed transaction.
Paytm said it will use the fresh capital to expand its mobile commerce and payment system in India, as well as invest in marketing, technology and talent.
Paytm has more than 100 million wallet users who carry out over 75 million transactions a month, according to the statement.
“India is an important emerging market with strong e-commerce potential, and we look forward to partnering with Paytm to deliver innovative products and services to consumers. This investment will further expand Alibaba Group's global footprint to India’s thriving mobile commerce market,†said Daniel Zhang, CEO of Alibaba Group.
Vijay Shekhar Sharma, founder and CEO of Paytm, said, “With the Alibaba and Ant Financial partnerships, we look to bring half a billion Indians to the mainstream economy and help millions of small businesses leverage this large m-commerce opportunity.â€
While Citibank acted as exclusive financial advisor to Paytm, Shardul Amarchand Mangaldas & Co acted as the legal counsel for One97 Communications and the company’s existing investors - SAIF Partners, SVB India Capital (now InnoVen Capital) and SAPV (Mauritius) - on the transaction.
Founded in 2000, One97 is a mobile-internet company that offers digital goods and services to its mobile consumers under the Paytm brand. It also provides mobile advertising, marketing and payments for merchants.
The company had previously raised funding from SAIF Partners, Intel Capital and Silicon Valley Bank (now InnoVen Capital). It also counted small shareholders like IDFC, Reliance Capital besides individual investors such as Nikhil Vora.
It first raised Rs 26 crore (around $6 million then) in March 2007 from SAIF and SVB. It got Rs 10 crore ($2.5 million) more from the same investors at the end of the same year through convertible securities. A year later, it scooped just under Rs 50 crore ($10 million) from Intel Capital and SVB.
One97 had also filed to go public, where it sought to raise Rs 120 crore. It had received a go-ahead from the market regulator SEBI and had originally planned to list by December 2010. But it later shelved the IPO plan and decided to rope in a new private investor.
At that time it raised $10 million in its third round of funding from SAP Ventures in 2011, the corporate venture capital arm of German software giant SAP. The company’s valuation during this round was nearly $300 million.
