Paytm Mall, the eCommerce platform from India’s leading digital payments startup Paytm, is aiming to dethrone Amazon and Flipkart from the pole position in the Indian eCommerce market.
With Flipkart having raised a massive multi-billion dollar funding rounds this year, and Amazon already having backing of Amazon Inc. and its founder Jeff Bezos, with virtually unlimited resources, Paytm Mall too needs access to large capital to fulfill its aim.
So, in line with that, the eCommerce entity of Paytm is reportedly looking to raise around $500-600 million in a new funding round. As per the report, the company is in talks with its existing investor, Japan-based SoftBank to lead the round with around $300 million. The remaining amount is expected to come from other existing investors.
Economic Times quotes a person who is close to the deal talks, saying,
The funding proposal is yet to be discussed with the company board. However, there are informal commitments that have come through from investors. They still need to set a valuation for the transaction as the initial capital from Alibaba and SAIF was an internal round.
Paytm Mall has been trying to improve the user experience on its platform. Ahead of the festive season sales during Diwali, the company removed around 85,000 sellers from the platform and has allocated capital for improving logistics services.
However, there are talks about possible conflict-of-interest for SoftBank given that it made a massive amount of invest in Flipkart. However, a person aware of the matter says that there won’t be such issues given that Pytm Mall is building an online marketplace, mostly driven by the point-of-sale merchants who are offline, which is different from Flipkart’s business centred around online sellers.
While the eCommerce entity may not be directly in competition, but it seems that the payments platform competes with each other directly. Flipkart’s payments business under PhonePe competes with Paytm and Paytm Mall, and thus, SoftBank will need consent from all stakeholders to get the deal through, said the source to ET.