Paytm’s eCommerce arm raises ₹1350 Crores from Alibaba, SAIF Partners

paytm
bitcoin trading

Putting an end to a week long speculation, Paytm has announced to raise 1350 Crores ($200 Million) from existing backers Alibaba and SAIF Partners. The investment comes for the demerged eCommerce arm of Paytm, which operates under Paytm eCommerce Private Limited. The deal values Paytm eCommerce to $1 Billion (6700 Crores).

According to the filing made with Registrar of Companies, Alibaba is investing $177 Million in the current round, whereas rest of the amount comes from SAIF Partners, which was an early investor in One97 Internet.

Before the current transaction, Alibaba and its payments arm Alipay had a combined stake of 40% in Paytm eCommerce. After the fresh infusion of $177 Million, the stake owned by Alibaba has grown by 22% to 62% and it becomes the single majority stakeholder in the company.

Ever since Paytm launched its new smartphone app for eCommerce, speculations were being made about Alibaba’s grand entry in India. With this funding, Alibaba can surely target to compete with global giant Amazon and homegrown rival Flipkart in India. Alibaba also holds less than 5% stake in Snapdeal, however, off late, it has shown more affection towards Paytm and the exponential growth of Paytm over the last few months has given more confidence to the Chinese investor.

According to Goldman Sachs, online retail market in India is expected to grow to $69 Billion by the end of FY20. It was calculated to be around $14-$16 Billion at the end of FY16, up from $11 Billion in 2015.

LEAVE A REPLY

Please enter your comment!
Please enter your name here