China’s e-commerce giant Alibaba made a strategic investment in Paytm, India’s largest mobile payment and commerce platform, giving it a 40 per cent stake in the firm.
Citing sources close to the deal, the Economic Times reported that Alibaba will invest $680 million for about a 20 per cent stake in India’s rising mobile money star.
Ant Financial, Alibaba’s payment unit, picked up a 25 per cent stake in Paytm’s parent company One97 Communications in February for a reported $575 million, but only $200 million of that investment was made in the first tranche, the Times said. The new investment covers the remaining $375 million, and Ant Financial’s interest will be reduced to 20 per cent. Ant Financial has provided strategic and technical support to Paytm.
The fresh infusion of capital, Alibaba said in a statement, will allow Paytm to achieve scale and develop its mobile commerce and payment ecosystem in India and invest in marketing, technology and talent.
Vijay Shekhar Sharma, Paytm founder and CEO, said: “With the Alibaba and Ant Financial partnerships, we look to bring half a billion Indians to the mainstream economy and help millions of small businesses leverage this large m-commerce opportunity.”
Paytm said in August it is the first mobile wallet in the country to pass 100 million users, who make more than 75 million transactions a month.
A month ago Paytm said it will launch a messenger function, reversing a trend for messaging firms to add a payments capability to their core offering.