Paytm, India’s largest mobile wallet service, has exceeded its own performance targets, and has now received approval for a cash injection from Alibaba unit Ant financial services.
This latest investment will now raise Paytm’s market value significantly. The mobile wallet is now valued at $1.83 billion, making it one of India’s four most valuable internet start-ups.
Paytm has surpassed its own targets specifically by crossing the 50 million digital wallet users on its platform. The company now has more than 66 million wallets and expects the number to cross 100 million by December.
Paytm has 30,000 merchants on its platform and is expecting to reach around 100,000 by the end of 2015.
Although Paytm is owned primarily by One97 communications, the funding is coming from Ant financial services, a company owned by Chinese e-commerce firm Alibaba. Ant’s stake in Paytm has now risen to 41 per cent. Paytm should receive the money within the next six months.
‘‘When a strategic investor steps in, you tend to go with the strategic partner for follow-on rounds,” said Vineet Toshniwal, managing director of investment bank Equirus Capital.
This is Ant’s largest investment with Paytm to date. Previous investments of $135m and $65m had given the firm a 25.88 per cent stake in Paytm.
‘‘Alipay wants to replicate the Alibaba story in India and it is a strategic player with very deep pockets which will pump in as much money as it can to make sure the investee company is a market leader,’’ continued Toshniwal.
With this new valuation, Indian company Paytm is now in the same league as e-commerce juggernauts Flipkart, Snapdeal and Ola, an Indian taxi business.
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