One 97 Communications Ltd, which runs mobile payments and e-commerce platform Paytm, is in talks to raise $300-350 million (Rs 2,000-2,350 crore) from a clutch of potential investors that include chipmaker MediaTek Inc, Singapore state investment arm Temasek Holdings Pte and Goldman Sachs Inc, several media reports said.
According to Mint, which reported the development citing sources privy to the development, Taiwan’s Foxconn and Singapore’s sovereign fund GIC Pte are also likely to participate in the fundraising round. Existing investors Alibaba Group and SAIF Partners will also participate.
The deal’s final structure is being worked upon and is likely to be finalised in 30-60 days, the report said, adding that is likely to double Paytm’s valuation to $5 billion from the last reported figure in 2015.
According to The Economic Times, Paytm is likely to deploy this funding across all verticals of the business including digital payments, online marketplace and the upcoming payments bank.
E-mail queries sent to Paytm founder Vijay Shekar Sharma did not elicit any response at the time of filing this report.
If and when raised, the deal would be one of the largest fundraising exercises this year in the consumer Internet space. The deal would also assume a lot of significance as it would come in a constrained funding environment. Many startups have been struggling to raise funding and even more established names such as Flipkart and Snapdeal are no exceptions to this trend.
At a recent TechCircle event, Sharma had said that there was a perpetual investor interest in Paytm and that he declined investment offers on a regular basis.
Paytm has also spun off its e-commerce business even as existing investor Alibaba is trying to enter India either independently or through an acquisition. Paytm has created a new entity called Paytm E-Commerce Pvt Ltd for this purpose.
Alternatively, Alibaba is also reportedly mulling as to whether it should put money directly into the parent company One 97 or buy stakes in Paytm Payment Bank Ltd and Paytm E-commerce, according to Mint.
Paytm, which is one of the 11 recipients of the payments bank licence, is likely to launch the business during this festive season. In February, it had also hired former RBI executive Shinjini Kumar to head this arm.
For the year ended March 2015, Paytm reported net sales of Rs 323 crore. However, its expenditure doubled to Rs 674 crore and it registered a net loss of Rs 372 crore, according to data available with VCCEdge, the data research platform of VCCircle.
Paytm is considered the market leader in the mobile payments space with Snapdeal-backed Freecharge snipping at its heels, according to media reports. The high potential investor interest in Paytm could also probably be attributed to the fact that India is taking baby steps toward a shift to a cashless economy.
Last Thursday, the National Payments Corporation of India (NPCI) launched the unified payments interface (UPI) that will make it possible for customers to make everyday payments with just a few taps on their smartphones.
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