Online retail firm Paytm Mall has received a capital investment of about Rs2,900 crore (about $450 million) from Japan’s Softbank Group Corp. and existing investor Alibaba Group Holding Ltd in a new round of funding, as per media reports.The funding will come in four tranches, according to the official documents. Paytm Mall confirmed the development.
SoftBank will invest Rs 2,600 crore in Paytm Mall, with the rest coming from Alibaba, the documents show. The first tranche of Rs357.5 crore has already come into Paytm Mall, according to documents provided by Paper.vc.
Paytm Mall, run by Paytm E-commerce Pvt. Ltd has been valued between $1.6 billion and $2 billion, according to sources close to the development.
One97 Communications Ltd, the parent entity that owns brand Paytm, turned the e-commerce business into a new mobile application and subsequently into a separate website in February 2017. The platform Paytm Mall is inspired by Alibaba’s T-mall in China.
The company in 2017 raised $200 million from China’s Alibaba Group at about $1 billion and became Alibaba’s official e-commerce play in India. In 2016, the Chinese online retailer was thinking about a standalone entry into India or an acquisition.
The company serves around 700 cities across India.
The development comes at a time when SoftBank, along with Tiger Global, is spearheading a Flipkart sale Walmart Inc. This will be SoftBank’s second investment in an online retailer in India. Paytm Mall is at loggerheads with Flipkart.
“This latest investment led by Softbank and Alibaba reaffirms the strength of our business model, growth trajectory, execution capability and the potential of India’s massive O2O model in the retail space,”
said Amit Sinha, the chief operating officer at Paytm Mall.
Paytm Mall would work towards increasing the growth of business for the offline merchants who serve their customers daily. They would be empowered with superior technology, building superior logistics that would not only strengthen the brand but would also enrich the customer experience.
Paytm Mall claims a run rate of $3 billion in GMV (gross merchandising value) and says it is aiming for a $10 billion run rate at the end of fiscal 2018-2019.
Offline stores registered on its platform drive over 60% of sales. It has currently partnered with 75,000 stores aiming to triple its offline presence by the end of 2019.
Paytm Mall also works together with such as Samsung, LG, Lenovo, Intel, Red Tape, Canon, HP, Godrej, Hitachi, Bluestar, Whirlpool, Bosch, IFB and Intex among others.
Paytm has been in news lately and for all the right reasons. Off late, Paytm has brought about a refinement in the app’s user experience by adding multiple payment methods, including bank-to-bank transactions under its ‘Money Transfers’ option.
Through this overhaul of the app, the company seeks to overpower WhatsApp and Google’s payment businesses in the country.
Paytm has a budget of Rs 250 crore to promote money transfers. The company expects transactions under this to account for one-third of total transactions by the end of the year.
Also, last month, Economic Times reported that Paytm has shown interest in the flourishing market of alternative lending. It is aiming to seek a license from the RBI to operate a P2P lending platform.
It is now time for everyone to see how Paytm Mall makes use of the funding to its advantage in its competition with Flipkart.
Also Read: Come This March End, The Ongoing Flipkart-Walmart Deal Might Get Finalised
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