Venture

Indian Payments Giant Paytm Raises $1B At A $16B Valuation

In India, the financial technology sector continues its rise.

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On Monday, e-commerce payments giant Paytm, the leading brand of mobile internet company One97 Communications, announced on its blog that it had raised a new round of funding. The company itself did not disclose how much capital it it raised, or the valuation. The company did disclose the investors involved, however. It was mostly an inside round, with investments from existing shareholders like Ant Financial, SoftBank Vision Fund, and Discovery Capital. The only disclosed new investor is T. Rowe Price and the funds and accounts operating under its aegis.

Bloomberg reported that the company raised $1 billion in equity funding at a $16 billion valuation, according to an unnamed source. The person told Bloomberg that Paytm may be seeking an additional $1 billion in debt.

The company and its valuation are growing rapidly. The $16 billion valuation earned in this latest funding round is up from a $10 billion post-money valuation from late August 2018, following a $300 million capital infusion into parent company One97 by Berkshire Hathaway. Warren Buffet, founder and leader of the Omaha-based investment firm, was not involved with that deal, according to a Berkshire Hathaway representative quoted by Indian financial news site LiveMint, which initially broke the news.

In its press release from today, the company suggests it is entering a new phase of growth. Paytm spread its QR-based payments technology to shops and local retailers throughout India, now “serving merchants in over 2000 towns and cities spanning across 650 districts,” the company said in its press release.

To fuel its next stage of growth, Paytm plans to expand the scope of its product and service offerings, becoming a more full-fledged financial technology conglomerate in the process. Paytm said it plans to bring “new-age financial services such as lending, insurance, investments, stockbroking to the masses. We are also strengthening user engagement with content services under Paytm Inbox that offers games, news, videos and more.”

Paytm does have an interesting opportunity before it: to enable hundreds of millions of Indian citizens to leapfrog over various parts of the legacy financial system into a new walled garden of its own making.

The company said it plans to invest ₹10,000 Crore (or ₹100 billion, which is roughly $1.4 billion USD) on financial inclusion efforts, which will likely yield the company even more users in the future.

Illustration: Li-Anne Dias

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