Paytm to Hold Up $2 Billion Valuation

On Tuesday, online payments services corporation Paytm announced it is in the midst of raising $1.5-2 billion. The fund will come from current investors SoftBank Vision Fund and Alibaba’s financial associate Ant Financial.

The information came from people with knowledge of the development.

The latest financing round will be at One97 Communications, the parent-firm of Paytm.

Moreover, it is possible to peg the company’s valuation at $16-18 billion.

New investors may also join the existing round.

Last year, Paytm was expecting to see a significant spike in the $10 billion valuation. The value was attributed when Warren Buffett-led Berkshire Hathaway invested $300 million.

According to sources, the firm was at $16 billion valuations in a subsequent round a few months ago.

Meanwhile, a secondary sale is when an existing investor sells its stocks to a new one, and the money does not come into the company’s funds.

The Escalating Competition

One spokesperson stated, “While SoftBank and Ant Financial’s capital is already in, the company engages with other investors and may take the round to as much as $2 billion. But it is most possible to be an internal round.”

In 2017, SoftBank was the first investor who invested in the company that holds a stake of 19%.

Meanwhile, the Alibaba group, through Ant Financial and Alibaba directly, maintains 38% of One97 Communications.

A SoftBank spokesperson indicated that the company would not comment regarding the speculation. In addition, Paytm founder Vijay Shekhar Sharma declined to comment.

Paytm stated it needs capital to avoid competition from the payment units of global giants Google and Amazon besides local competitors such as Flipkart-owned PhonePe.

This is in a fast-growing digital payments market, which improved after demonetization in late 2016.

Last month, Paytm probed more than 221 million transactions on the Unified Payments Interface (UPI).

Elsewhere, PhonePe and Google Pay are running behind their transactions, which is estimated at 180-190 million each.