Paytm today announced that Ant Financial Services Group, which is essentially the financial services arm of Alibaba, has bought a 25 percent stake in the company. Neither company has revealed how much the deal is worth, only saying that the deal will be closed in the second quarter of this year. 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
This is in line with earlier reports that claimed Alibaba was looking at investing as much as $575 million (Rs 3,600 crore approximately) in Paytm for a 25-30 percent stake. Temasek Holdings was also said to be in running to invest in Paytm, but Alibaba has clearly upstaged the Singapore-based company. The report also claimed that the deal will push Paytm s value to over $1.5 billion. Also Read - 5 apps helping people get through the COVID-19 second wave: Twitter, CoWIN, Aarogya Setu
“With over 1 billion people, India’s payments market has vast untapped potential,” Cyril Han, vice president of Ant Financial said. “As smartphone use continues to rise in India, we see great opportunity in the mobile wallet space and Paytm, as a leader in this field, is best equipped to build a mobile payments ecosystem in the country.
This deal is the first time Ant Financial has invested in a company in India. The company, which also runs Alipay Wallet, will provide its expertise to Paytm, and is also likely to integrate its Wallet with Paytm s mobile wallet. Alipay boasts over 190 million users, while Paytm has more than 23 million registered users. Paytm started off as a mobile recharge service but recently pivoted to become a full market place along with its recharge and bill payments services.
Alibaba is the latest company, to invest in the booming e-commerce market in India. Back in October last year, Japan-based Softbank invested $627 million (approximately Rs 3,845 crore) in Snapdeal.