BENGALURU: Japan’s SoftBank is in advanced talks to lead a new round of funding of Rs 3,000 crore in Paytm Mall, according to two sources familiar with the development, as the latter beefs up its fund-raising to take on rivals Flipkart and Amazon. Paytm Mall, in which Chinese ecommerce Alibaba and its payment affiliate Ant Financial hold a majority stake, is expected to be valued at around $2 billion or Rs 13,000 crore, becoming another Unicorn or a billion-dollar valuation startup.
The company is also in talks with several other investors like Singapore’s Temasek Holdings and China’s Primavera Capital Group to raise another Rs 1,000 crore as it eyes the top spot in the highly-competitive online retail market, according to one of the sources mentioned above.
“The deal with SoftBank is expected to close by the end of the month after which the company will continue to raise more capital,” said the source. If the deal goes through, this will Soft-Bank’s third bet in the online retail market, after backing Snapdeal in 2014 and Flipkart in 2017.
Alibaba, which along with SAIF Partners had invested $200 million in the company a year ago, is also expected to participate in the round. After the round, the combined shareholding of Alibaba and Ant Financial, which stands at over 55% right now, is expected to get diluted to a significant minority.
Both Primavera and Temasek have invested in multiple Alibaba Group companies, including Alibaba and Ant Financial.
SoftBank and Paytm Mall COO Amit Sinha declined to comment when contacted by ET. Alibaba, Temasek and Primavera did not respond to ET’s queries at the time of filing this article.
ET was the first to report in September that Paytm Mall had started discussions to raise around Rs 3,000-4,000 crore.
According to investors tracking the space, there is an opportunity that can be leveraged by companies such as Paytm Mall as the online retail market has consolidated over the past two years.
“I see Paytm Mall as an opportunity to aggregate the large fragmented merchant base/small shopkeepers across India. Large ecommerce players like Flipkart or Amazon marketplaces are largely served by dealers or product manufacturers,” said Rutvik Doshi, managing director at venture capital firm Inventus. “But it is very hard for small shopkeepers to be part of Flipkart/ Amazon. However, large number of them signed up for Paytm to accept payments and Paytm Mall can now extend additional services to them.”
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