Chinese e-commerce giant Alibaba Group along with its payments arm, Ant Financial Services Group, had made a strategic investment in m-commerce platform Paytm.The fresh capital infusion will allow Paytm to achieve scale and develop its vibrant mobile commerce and payment ecosystem in India and invest in marketing, technology and talent. Investing in Paytm will enhance the ability of Alibaba and Ant Financial to tap opportunities in India’s fast-growing mobile e-commerce marketplace and digital finance industry.
In a statement from Alibaba, they said India is an important emerging market with strong e-commerce potential, and we look forward to partnering with Paytm to deliver innovative products and services to consumers. Supporting the success of local home grown entrepreneurial companies has long been an important part of Alibaba Group’s globalization strategy. This investment will further expand Alibaba Group’s global footprint to India’s thriving mobile commerce market.
The deal value have been remained undisclosed, however as per the sources Alibaba was investing about $680 million into the payments processor and marketplace. This led Alibaba group’s total investment in Paytm to around $900 million, including previous round of funding by Ant Financial.While this is Alibaba’s first direct investment in Paytm, its affiliate Ant Financial in February committed to buy a 26% stake in Paytm for about $575 million in a move to tap the fast-growing mobile payments business in the country.
As per the new agreement Alibaba and Ant Financial would each hold 20% stake in Paytm and collectively the Alibaba group would have a 40% stake in the company, as per the sources.Citibank acted as exclusive financial advisor to Paytm for this transaction. The funding amount will be used to expand its mobile commerce and payment system in India, as well as enhancing its technological offerings and hiring new talents.
Founded by Vijay Shekar, One97’s flagship product, Paytm offers mobile wallets that allow consumers to use mobile phones and other handheld devices to pay for purchases. From a mobile payment startup, the company morphed itself into an ecommerce portal to compete with the likes of Amazon, Flipkart and Snapdeal.
