Published: Tue, April 03, 2018
Business | By Tara Barton

SoftBank, Alibaba to invest United States dollars 445 million in Paytm E-commerce

SoftBank, Alibaba to invest United States dollars 445 million in Paytm E-commerce

According to two sources close to the matter, the deal values Paytm Mall somewhere between $1.6 Bn-$2 Bn.

According to a stock exchange statement by GCL-Poly Energy Holdings Ltd (HKG:3800) last week, Golden Concord has signed a memorandum of understanding (MoU) with SoftBank Vision Fund LP, acting via its manager SB Investment Advisers (UK) Ltd, which is a subsidiary of SoftBank. The company is also in talks to raise an additional Rs 1,000 crore.

Funding for the project will come from SoftBank's Vision Fund, which counts Apple, Foxconn and Saudi Arabia's sovereign wealth fund among its backers.

"This latest investment led by Softbank and Alibaba reaffirms the strength of our business model, growth trajectory, execution capability and the potential of India's massive O2O model in the retail space", said Amit Sinha, chief operating officer at Paytm Mall. Currently, Alibaba along with Alipay holds 57% stake in Paytm Mall.

He further added that the funds will be deployed for empowering the shopkeepers with superior technology, building superior logistics, strengthening the Paytm Mall brand and bringing an enriching experience to the customers.

It may be noted that a filing with the Registrar of Companies revealed Softbank units would get a 21.1 per cent stake in Paytm E-commerce after the investment, planned in four tranches. The development comes at a time when the SoftBank-backed Flipkart is in final stages of getting on board Walmart as the e-commerce battle continues in the country.

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Interestingly, SoftBank Vision Fund is also an investor in Paytm Mall rival, Flipkart where it had led a Dollars 2.5 billion financing round previous year becoming one of the largest shareholders in the Bengaluru-based company.

The deal values Paytm Mall, run by Paytm E-commerce Pvt.

Paytm Mall in India competes with Amazon and homegrown Flipkart, both of which are immensely popular among India's online shoppers.

Paytm Mall has been making inroads into the Indian ecommerce market, replacing Snapdeal as the third largest player after Flipkart and Amazon India. It was also reported that Paytm Mall has put a target to achieve $10 Bn gross merchandise volume run rate by end of FY19.

Paytm Mall focuses primarily on its online-tooffline model which drives nearly 60% of its overall sales through its partnership with 75,000 stores. It has now partnered with 75,000 stores and aims to triple its offline presence by the end of 2019.

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