Mobile wallet service Paytm is all set to get a huge investment from Chinese internet giant Alibaba. To help push Paytm s e-commerce business, Alibaba will reportedly be making an investment of $200 million (around Rs 1,350 crore), which will give Paytm a valuation of about $1 billion. According to reports, the new entity will spin out of this funding, and will be called Paytm E-Commerce. Also Read - How to book COVID-19 vaccine slot via Paytm App, get Covaxin and Covishield shots with these simple stepsAlso Read - Alert! Paytm cashback scam: Fake Paytm website, it's a trick to steal your money
Alibaba and its affiliate Ant Financial will have a combined stake of over 50 percent in the new entity. According to reports, Alibaba’s payments affiliate Alipay and venture capital firm SAIF Partners, are also investing in the deal. Paytm s parent company One97 Communications Ltd was valued at $5 billion the last time it raised about $60 million from new investor Mediatek in 2016. Also Read - 5 apps helping people get through the COVID-19 second wave: Twitter, CoWIN, Aarogya Setu
Under the new entity, Paytm will be building a separate app and website. It is likely to be inspired by Alibaba s T-mall in China, and be named PaytmMall. However, the existing Paytm app which allows users to recharge or pay for bills, or book for movies, and more will continue to function in the same fashion. It is to be noted that the current Paytm app also allows one to shop through the app but the purported PaytmMall will be a standalone platform for online shopping. It is expected that PaytmMall app and website will debut this month. BGR India has reached out to Paytm for comments.
A report on Livemint notes that with the huge investment in Paytm, Alibaba will be able to further its push into the e-commerce sector in India. In 2016, the internet company was looking at options to break into the online retailing space in the country with either an acquisition or a standalone entry. Given Paytm s newfound success, thanks to the demonetization of old currency notes and the government s push towards a digital economy in India, an investment from China s biggest e-commerce player is like a welcome move. ALSO READ: Paytm now lets you add money to wallet with UPI, here s how it works
With the launch of a standalone online marketplace, Paytm will be competing against existing players — Flipkart, Snapdeal, and Amazon. What is likely to help Paytm immediately grow up to customers expectations is its existing popularity. The company which started out as a mobile payments and recharge service in 2015, is currently among top three consumer Internet companies in the country. In the wake of demonetization, Paytm has seen over 700 percent increase in overall traffic on its platform.