Wednesday, October 4

Paytm Mall Raises $445 Mn Funding From SoftBank and Alibaba

Paytm has been all over the landscape these past few weeks and days with major consecutive news announcements. This time, Paytm mall, the e-commerce daughter business of Paytm has raised over $445 Mn in funding from Japanese conglomerate SoftBank and Alibaba, the Chinese e-commerce giant.

Regulatory filings reveal that SoftBank has been the major investor in this round, funding around $400 Mn of the total amount while Chinese company, Alibaba, fueled the rest. The first tranche of $55 Mn has already been sent to Paytm Mall’s account.

Paytm Chief Operating Officer, Amit Sinha confirmed the news in a media statement saying, “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.”

SoftBank Vision Fund is also a major investor in Flipkart where it owns most of shares in the Bengaluru based company. However a SoftBank spokesperson reiterated the Japanese conglomerate decision to invest in Paytm Mall by stating its ability to enable over 15 million offline retail shops to contribute in India’s e-commerce surge.

“The SoftBank Group is excited to continue supporting Paytm as it develops into one of the leading internet ecosystems in the country. Our investment in Paytm Mall is part of that ongoing commitment,” the spokesperson said.

The deal is currently SoftBank’s first funding round in Paytm Mall and the Japanese body will hold over 20 per cent stake in the company after all the transactions go through.

The funds raised will serve to provide shopkeepers of Paytm Mall with state-of-the-art technology, building advanced logistics and to strengthen the brand image of Paytm Mall as well while providing its customers with a user-friendly experience.

Anonymous sources close to the company revealed that the deal values the subsidiary company of Paytm between $1.6 Bn – $2 Bn.

The operations of Paytm Mall is hugely inspired on China’s TMall retail model. It began operating as an independent body from Paytm and a consumer shopping app in February 2017. One month later, Alibaba fueled the company with $200 Mn funding. In December 2017, reports emerged speculating that Paytm would prepare around $2.5 Bn fund to invest in its e-commerce branch within the next three to five years.

When the e-commerce was first launched, it boasted over 140,000 sellers but according to its official website, it presently boasts more than 10 Cr customers and provide products ranging over 500 categories.

Paytm Mall is also looking for ways to generate revenues through additional streams. They are reportedly aiming to achieve $10 Bn in gross merchandise volume run rate by the end of FY19.