Paytm May Acquire Freecharge After Raising $1.5 Billion From SoftBank

Must Read

After Flipkart’s largest-ever round of funding, other Indian unicorns have apparently set their eyes on raising billions of dollars in their next round of funding. Mobile Wallet platform Paytm, the most aggressive player among all, is reportedly in talks with Japan’s SoftBank to raise anything between $1.2 billion and $1.5 billion. If the deal goes through, SoftBank will become one of the largest shareholders in the Paytm.

The successful round of investment will make Paytm valuation soaring to nearly $7 billion to $9 billion, making it the second largest startup after the poster boy of Indian e-commerce revolution, Flipkart.

Flipkart recently raised $1.4 billion from Microsoft, eBay and Tencent at a valuation of $11.6 billion.

Advertisements

People familiar with the deal have said that paytm has planned to spend a majority of the new investment in buying its mobile wallet rival Freecharge from struggling e-commerce major Snapdeal. This will not only help Paytm to strengthen its market presence in digital wallet space but would also push the digital wallet industry to a consolidation and correction. It’s important to highlight that Softbank is a current investor in Freecharge-owned Snapdeal.

With the infusion of $1.5 billion, SoftBank will become the only investor making the single largest investment in any Indian startup.

The investment will also reduce the controlling power of Alibaba on Paytm, relaxing Indian government’s concern about growing influence of Chinese investment companies in Indian unicorns.

This is not the first time when SoftBank is evaluating Paytm for investment. In 2014, SoftBank was deeply involved in possible investment discussion in Paytm. However, SoftBank saw Snapdeal much more promising bet than Paytm and passed on. Later, in 2015, Paytm raised $1 billion from Alibaba and Ant Financial.

Quite recently, Paytm was valued $6 billion when some of the existing small investors, including Reliance Capital, exited Paytm by selling off their stakes to Alibaba and Any Financial.

Advertisements

The digital wallet business attracted the eyeballs of big fishes of the investment community after the demonetization. The exploded adoption of smartphone and mobile apps fueled the interest further. Government’s push to digital payment has worked well for Paytm.

1 COMMENT

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisement -

Latest News

How will the FIFA World Cup affect club football this year?

The announcement of the host nation for the FIFA World Cup 2022 met with shock from the moment the...
- Advertisement -

In-Depth: Dprime

Will ‘TikTok By Microsoft’ Be A Winner?

For the last two years, TikTok has been in the public eye for all sorts of reasons. First, it was the exploded and unparalleled...
spot_img

More Articles Like This