One97 Communications, which runs mobile payment and e-commerce platform Paytm, is in advanced talks to raise fresh funding of about Rs 2,000 crore ($300 million) as the company gears up to launch the payments bank and aims to boost its e-commerce business, according to several media reports citing sources.
When contacted by Indiaretailing Bureau, Paytm refused to comment on the matter.
The deal, which is expected to close in 30-60 days, will value Paytm at about $5 billion, more than double its last reported valuation of $2 billion in May 2015, reports say.
The investors involved in the fund raising include global financial services major Goldman Sachs, Singapore’s Temasek and semiconductor maker MediaTek. Existing investors such as Chinese e-commerce giant Alibaba and its arm Alipay are also taking part.
The development comes at a time when large Indian startups are struggling to raise fresh capital at valuations higher than in their last rounds. Flipkart, India’s largest e-commerce company, last raised money at $15.2 billion, but is now taking time to close a new round because investors are wary of offering a higher valuation.
Once completed, the Paytm transaction will be the largest funding round of any start-up in India this year.
Paytm recently separated its commerce business from the payments business as its key investor Alibaba Group Holding Ltd firms up plans to enter India either independently or through an acquisition. One97 has already created a new entity called Paytm E-Commerce Pvt. Ltd, to which it will transfer the online retail business of the payments and e-commerce platform.
The new entity was incorporated on 16 August and Paytm founder Vijay Shekhar Sharma has also incorporated Paytm Payments Bank Limited as a separate entity , documents filed with the Registrar of Companies show.
The new company shares a common address with One97’s Delhi office. Chinese internet giant Alibaba and its affiliate Ant Financial are the largest stakeholders, at 40 per cent, having invested $680 million in One97.