Paytm, India’s leading mobile wallet and payments company, aims to raise its valuation to $100 billion by the year 2025, its founder Vijay Shehkar Sharma said in an interview to CNBC TV18 after his company raised $1.4 billion from Japanese investor SoftBank in its largest funding to date. This happened just months after China’s Alibaba invested $177 million in Paytm Mall, Paytm’s marketplace business unit. Private equity player SAIF Partners also made a $23 million investment in Paytm Mall.
This is one of the biggest funding ever garnered by an Indian e-commerce firm and will help SoftBank to maintain its bellwether status of being the lead investor in the country. Sharma informed that after this deal, Softbank will get a seat on the Paytm board.
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“We are at an inflection point in our journey with Paytm. This investment by SoftBank and support of the incredible entrepreneur Masayoshi Son 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,” Sharma said in a statement.
“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,” said Masayoshi Son, chairman and chief executive officer, SoftBank Group Corp, in a statement.
Sharma informed that with this one-time investment of $1.4 billion, SoftBank will hold a 20 percent direct stake in Paytm, along with a 12 percent indirect holding through its majority stake in Alibaba, the Chinese internet giant that has 40% stake in One97, Paytm’s parent company. Sharma added that the equity of all current shareholders will be diluted after this funding and that Alibaba’s shareholding in One97 will go down to 20 percent from the current value while his own shareholding will remain around 16 percent.
On the acquisition of Freecharge, Sharma said that a term sheet has been given to Freecharge while Paytm evaluates the value add in terms of non-overlapping new customers it will get by acquiring Freecharge.