In what could possibly turn out to be the biggest single-round funding in an Indian e-commerce company, One97 Communications – the parent company of popular payments platform Paytm – is in advanced stages to raise up to Rs 12,000 crore ($1.9 billion) from Japanese media and telecom conglomerate SoftBank.
According to media reports, the funding could materialise within the next three weeks, though the Paytm Founder and Chief Executive Officer Vijay Shekhar Sharma has made no comment on it.
The deal will value the Noida-based company at around $9 billion and provide a 20 per cent stake to SoftBank, Economic Times quoted two people familiar with the transaction as saying. "The deal was agreed on earlier this week and is now waiting for board approval," said one person cited above.
The development comes at a time when Alibaba-backed Paytm is on an expansion mode and is said to be in discussions for a fresh round of funding as it begins its foray into banking, insurance and finance. Sharma already own a license for a payment bank and One97 is looking to earmark $1 billion to expand into these areas.
Also Read: PayTM marks first global foray, launches services in Canada
Paytm last raised funding from Taiwanese semiconductor maker MediaTek about eight months ago, when it was valued at $4.8 billion.
According to Sharma, the company would need around Rs 10,000 crore of investments in banking and finance for over three years. The funding from SoftBank is also crucial in view of the fact that it has been pumping in huge money into its growth plans. The company spent a staggering $105 million in the fourth quarter of FY2017 on various projects, including expansion in Canada.
Sources said the company has also received interest from US-based high networth individuals for investing in the company. While Sharma did not comment on the discussions, he said there is interest from across geographies for putting in funds. He was speaking at the launch of ‘Digital Gold’, a vertical to allow Paytm’s 200-million plus users to buy, store and sell gold instantly.
Earlier this month, India's largest online retailer Flipkart announced a $1.4-billion funding round from China's Tencent and American technology corporations — Microsoft and eBay, which valued the Bengaluru-based company at $11.6 billion earlier this month.
Notably, the Paytm funding will double the total investment in India by SoftBank.
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