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SoftBank, Alibaba to invest $445 million in Paytm

SoftBank, Alibaba to invest $445 million in Paytm

Paytm.

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India’s Paytm E-Commerce Pvt. Ltd. in this funding round will value the online retailer at roughly Rs 12,300 crore or $1.9 billion

Japan's Softbank group and Chinese e-commerce giant are now investing Rs 3,000 crore in Paytm Mall, as per documents filed with the Ministry of Corporate Affairs (MCA).

India’s Paytm E-Commerce Pvt. Ltd. in this funding round will value the online retailer at roughly Rs 12,300 crore or US$1.9 billion.

SoftBank Group is investing US$400 million and Alibaba, an existing investor in Paytm E-Commerce, is also putting in US$45 million in the round, the filing showed.

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The funding is expected to come in four tranches, as per the MCA filings. Currently, Alibaba along with Alipay holds 57% stake in Paytm Mall. However, after the fourth tranche of financing concludes, SoftBank Vision Fund will hold 21% and Alibaba (with Alipay) will hold around 46% stake in the e-commerce company.

SoftBank, which is among major investors in India’s fast-growing e-commerce sector and already owns a stake in Paytm’s parent, 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 in a statement on Monday.

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

SoftBank’s new interest in e-commerce space comes after the Japanese multinational conglomerate led a funding round in India’s largest e-commerce player Flipkart in 2017.

However, SoftBank is expected to dilute its shareholding in Flipkart with talks of Walmart making an investment in the online retailer, making the Paytm Mall investment a way to diversify its bets and compete against Amazon India.