Paytm is likely to get invested by the Chinese Internet Gaint Alibaba. The company rose funding of $180-$200 Million in a single round. The Indian online retailer now values the total of $1 Billion.
The funding will take Alibaba’s Ant Financial Affiliate to Paytm E-commerce, which is newly built by One97 Communications Ltd, which runs Alibaba E-commerce operations. All the operations of Paytm E-commerce will work under One97. The communication firm raised around $60 Million from their investors MediaTek in August 2016 and the total value of One97 is of $5 Billion.
By this deal Paytm will make up to 20% in the business of One97 Communications Ltd. For now, Alibaba has decided to raise 40% stake in Paytm E-commerce and make an entry in the Indian market. This deal will confirm that paytm will drive Alibaba to India and make a standalone entry for the Chinese Online Retailer Alibaba in 2017.
One97 hired former Bain Consulting executive Bharati Balakrishnan as the head of its Indian operations. Mr. Balakrishnan will now work closely with the Paytm E-Commerce team.
Reports are that Paytm will introduce a new application for E-Commerce and will run a new website named Paytmmall which will be inspired from Alibaba T-Mall in China. However paytm will run its regular operation through its old website and application.
When contacted to the spokesperson of Alibaba group, he declined the news about funding and commented: “While we are excited about addressing the market opportunity in India, we are not in a position to share any forward-looking information with you at this moment.” Paytm also haven’t commented on the deal.
For Alibaba, entering the Indian market will mark an expansion of its global footprint and offer a chance to grab a slice of one of the world’s most attractive markets for online retail, which is estimated to be worth $14-16 billion at the end of 2016, up from about $11 billion in 2015.
With this deal, Paytm will join the battle against country top online markets Amazon and Flipkart. This will be a Three-way battle among the e-commerce sharing platform.