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Paytm Mall Receives $445 Million From SoftBank, Alibaba

Paytm founder Vijay Shekhar Sharma.

Paytm Mall has raised $445 million (about Rs. 3,000 crore) from Japan’s SoftBank and Chinese e-commerce company Alibaba, increasing its valuation to $1.9 billion (about Rs 12,300 crore).

With the latest round of funding, Paytm Mall has gained unicorn startup status i.e. a privately held startup company with a current valuation of $1 billion or more.

The $445 million will come in four tranches, according to the Ministry of Corporate Affairs (MCA) filings quoted by Paytm. It will also lead to dilution of Alibaba and Alipay’s joint shares in Paytm Mall. Currently, they hold 57 per cent together, and it will go down to 46 per cent while SoftBank Vision Fund will hold 21 per cent.

“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 (online-to-offline) model in the retail space,” Amit Sinha, COO, Paytm Mall, told the Economic Times. “The funds will be deployed to empower the shopkeepers with technology, building superior logistics, strengthening the Paytm Mall brand and bringing an enriching experience to the customers.”

SoftBank has invested $400 million in this round while Alibaba and Alipay have together invested $45 million. The first tranche of Rs. 357.5 crore has already come into Paytm Mall, reported Inc42. In 2017, SoftBank had invested $1.4 billion in Paytm.

“The SoftBank Group is excited to continue supporting Paytm as it develops into one of the leading internet ecosystems in the country. We believe Paytm Mall’s offline-to-online operating model, combined with the strength of the Paytm ecosystem, is uniquely positioned to enable India’s 15 million offline retail shops to participate in India’s eCommerce boom,” said a SoftBank spokesperson, according to the Economic Times.

Paytm Mall has replaced Snapdeal as the third largest player e-commerce company, behind Flipkart and Amazon India. Paytm Mall exited FY18 at a gross merchandise volume (GMV) run rate of $3 billion.

Snapdeal might be selling its logistics arm to Future Group, the largest retailer in India, for about Rs 50 crore in an all-cash deal, the ET had reported in January 2018. “It will be a distress sale,” people aware of the deal were reported to have then said. Meanwhile, SoftBank and Ebay have written off their investment to Snapdeal.