New Delhi: Online retail firm Paytm Mall has received a capital commitment of about Rs2,900 crore (about $450 million) from Japan’s Softbank Group Corp. and existing investor Alibaba Group Holding Ltd in a new round of funding that will come in four tranches, official documents show.
SoftBank will invest Rs2,600 crore in Paytm Mall, with the rest coming from Alibaba, the documents show. The first tranche of Rs357.5 crore has already come into Paytm Mall, according to documents provided by Paper.vc.
The deal values Paytm Mall, run by Paytm E-commerce Pvt. Ltd, between $1.6 billion and $2 billion, two people close to the development said, on the condition of anonymity.
The development comes at a time when SoftBank, along with Tiger Global, is spearheading a Flipkart sale Walmart Inc. This will be SoftBank’s second investment in an online retailer in India. Paytm Mall directly competes with Flipkart.
Paytm Mall confirmed the development.
“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.
“We are committed to increasing the business growth for the offline merchants, who serve their customers’ daily. 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,” Sinha said.
Paytm Mall claims a run rate of $3 billion in GMV (gross merchandising value) and says it is aiming for a $10 billion run rate at the end of fiscal 2018-2019.
According to the company, offline stores registered on its platform drive over 60% of sales. It has currently partnered with 75,000 stores and aims to triple its offline presence by the end of 2019.
The company currently works with offline stores in partnership with brands such as Samsung, LG, Lenovo, Intel, Red Tape, Canon, HP, Godrej, Hitachi, Bluestar, Whirlpool, Bosch, IFB and Intex among others.
Paytm Mall currently serves 700 towns across India.
One97 Communications Ltd, the parent entity that owns brand Paytm, spun off the e-commerce business into a new mobile application and a separate website in February 2017. The platform Paytm Mall is inspired by Alibaba’s T-mall in China.
The company in 2017 raised $200 million from China’s Alibaba Group at about $1 billion and became Alibaba’s official e-commerce play in India. In 2016, the Chinese online retailer had contemplated a standalone entry into India or an acquisition.livemint