Paytm, operated by One97 Communications, has scooped $1 billion (Rs 7,170 crore) in a fresh round of funding led by American investment firm T Rowe Price as the group flagship attempts to face off against Google, Walmart’s PhonePe, and Facebook in the payments battleground.
Existing shareholders Discovery Capital, Ant Financial (formerly Alipay) and SoftBank also participated in the Series G round, with the deal struck at a valuation of $16 billion (Rs 1.14 trillion). There are just 27 listed firms in the country that are valued higher than this. With the latest funding, One97 has raised more than $3.3 billion so far.
Founder and chief executive Vijay Shekhar Sharma said the investment was a vote of confidence in Paytm’s commitment to providing Indians with new-age financial services. “At Paytm, we are committed to bringing half a billion Indians to the mainstream economy by onboarding them in the formal financial ecosystem,” he added.
Paytm said that it will invest Rs 10,000 crore over the next three years to further financial inclusion for underserved users in the country.
The announcement of the funding comes around a month after reports said that Baltimore-headquartered T Rowe, D1 Capital and Discovery Capital were looking to invest. At the time, Paytm was also in talks to raise another $1 billion in debt.
T Rowe had earlier backed Flipkart, which was acquired by Walmart last year. Discovery has backed startups like streaming major Spotify. Ant Financial – which is part of the Alibaba Group – and SoftBank are major investors, holding 46.76% and 20% stakes in Paytm, respectively, according to VCCEdge, the data research arm of Mosaic Digital.
Paytm has raised this funding more than a year after billionaire Warren Buffett-led Berkshire Hathaway picked up a stake in One97.
One97 operates the digital payments and e-commerce businesses through separate entities. Other investors in One97 include multi-stage investment firm SAIF Partners, Sapphire Ventures, Ratan Tata, and MediaTek Inc.
Paytm and its parent company operate in several verticals through separate entities. Some of these include financial services such as a payments bank, mutual funds, gold investments and credit; e-commerce and online ticketing; digital gaming and other entertainment-based services.
One97 has several competitors in the segments it operates in: For example, in the payments banks space, it competes against Bharti Airtel Ltd, Reliance Industries Ltd’s Jio and the government-run India Post. For a while, it also competed against Aditya Birla Idea Payments Bank Ltd, which shut down operations in July this year.