The Japanese internet and telecom giant Softbank has led one of the largest investment rounds in Indian startup scene by investing $1.4 billion (approx Rs 9,000 Cr) in Paytm. China's Alibaba, which counts SoftBank as its biggest investor, already has a stake in Paytm.
Paytm plans to invest Rs 10,000 crore (approximately United States $1.6bn) over the next three to five years towards its commitment to enabling half a billion Indians to join the mainstream economy.
Speaking on the occasion, Founder & CEO, Paytm, Vijay Shekhar Sharma said, "We are at an inflection point in our journey with Paytm".
The company was valued at $6 billion in March when Paytm's existing investors Reliance Capital, SVB and SAP ventures sold their stakes of about 4.3% to Alibaba Group & Ant Financial Services Group.
"SoftBank backing us shows their belief in Paytm and our plans of becoming a full-fledged financial services company".More news: United kids need more time admits Mourinho
Viajy further said that it is a great opportunity for the company to bring financial inclusion to half a billion Indians.
In addition, Paytm witnessed an uptake in its movie ticketing and travel booking (rail, bus and flight tickets) businesses. 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.
Paytm, which has around 230 million wallet-users, plans to launch its payments bank on May 23, and will use the money to acquire new 500 million customers and launch a slew of financial service products such as wealth management, deposits, and money lending, among others. While it has pumped in close to $2 billion into Indian startups in last few years, it has also written off a significant portion of that on account of loss in valuation.
The company said that it would introduce the Paytm Payments Bank, a mobile-first product that will reach every corner of the nation, and focus on the millions of unserved and under-served Indians. Prior to this round, the payments firm, which started life as mobile value added service delivery platform in 2000, raised $60 million from Taiwan's Mediatek at a $4.8 billion valuation in August past year. Paytm also has an e-commerce business, which, earlier this year, was spun off into a separate entity - Paytm E-commerce. In January 2014, it launched the Paytm Wallet.