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In January this year we reported that Paytm was in advanced talks to raise fresh funding of more than $500 and today Chinese e-commerce giant Alibaba Group and its payments arm Ant Financial Services Group are investing an undisclosed amount in online payments processor and marketplace Paytm, the companies said in a statement on Tuesday.

Regarding size of funding one of the source reported that Alibaba Group Holding will pick up about 20% stake through a fresh issue of shares by investing about $680 million (around Rs.4,450 crore).

Paytm, which received a payment bank licence from the Reserve Bank of India (RBI) in August, will use the fresh capital to invest in marketing, technology and talent.

The news comes nearly a month after Alibaba pumped in millions of dollars in India’s second-largest e-commerce firm Snapdeal.

While this is Alibaba’s first direct investment in Paytm, its payments arm Ant Financial already acquired 25 percent of One97 Communications, the parent company of Paytm, in February in a transaction that a person with knowledge of the matter said was worth more than $500 million (roughly Rs. 3,100 crores).

Under the financial contours of the transaction, existing investor Saif Partners’ stake comes down to 30% from 37% while Paytm’s founder and Chairman & Managing Director Vijay Shekhar Sharma now owns about 21%, down from 27%.

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