SoftBank investing $525m in India's Paytm E-Commerce

A Paytm payment sign displayed at a fast-food restaurant in Bengaluru. Paytm Mall will deploy the latest investment to beef up its technology, among other things.
A Paytm payment sign displayed at a fast-food restaurant in Bengaluru. Paytm Mall will deploy the latest investment to beef up its technology, among other things.PHOTO: BLOOMBERG

MUMBAI • SoftBank Group is investing US$400 million (S$525 million) in India's Paytm E-Commerce in a funding round that will value the online retailer at roughly US$1.9 billion, a regulatory filing showed on Monday.

Alibaba, an existing investor in Paytm E-Commerce, is also putting in US$45 million in the round, the filing showed.

SoftBank, which already owns a stake in Paytm's parent One97 Communications, confirmed investing in Paytm Mall, the brand name under which Paytm E-Commerce operates an online market place.

"We believe Paytm Mall's offline-to-online operating model, combined with the strength of the Paytm ecosystem, is uniquely positioned to enable India's 15 million offline retail shops to participate in India's e-commerce boom," SoftBank said on Monday.

In a separate statement, Paytm Mall chief operating officer Amit Sinha said the company would deploy the latest investment from SoftBank and Alibaba to beef up its technology and build superior logistics, among other things.

A filing with India's Registrar of Companies showed SoftBank units will get a 21.1 per cent stake in Paytm E-Commerce after the investment.

Alibaba.com Singapore E-Commerce, which currently owns 36.3 per cent of the Indian e-retailer, will remain the single-largest shareholder but with a relatively smaller stake of just over 30 per cent after its latest investment is completed.

BRIGHT OUTLOOK

We believe Paytm Mall's offline-to-online operating model, combined with the strength of the Paytm ecosystem, is uniquely positioned to enable India's 15 million offline retail shops to participate in India's e-commerce boom.

SOFTBANK GROUP

Paytm E-Commerce competes with Amazon.com's Indian unit and home-grown Flipkart.

A group company of One97 Communications runs India's biggest digital wallet services and also has a stake in a payments bank.

SoftBank's Vision Fund took roughly a fifth of Flipkart last year for US$2.5 billion. The Japanese group is also one of the biggest investors in Snapdeal, another Indian e-tailer.

REUTERS

A version of this article appeared in the print edition of The Straits Times on April 04, 2018, with the headline 'SoftBank investing $525m in India's Paytm E-Commerce'. Print Edition | Subscribe