Chinese E-commerce giant Alibaba along with its affiliate Ant financial have together pumped around £680 million into Noida-based digital payment player Paytm. The investment has come right before the festive season kicks in with its associated higher spending for ecommerce players. With this investment Alibaba directly would have 20% stake and Ant’s shareholding will come down to 20% from the 25% it had previously.
Ant financial had committed an investment of £575 million in Feburary this year and they already injected $200 million as first tranche of Feb agreement. This $500 million will include £375 million which Ant financial was expected to invest in Paytm based on performance.
Paytm is expected to use the fresh capital infusion to develop its mobile commerce and payment platforms as well as make investments in marketing, technology and talent. Ant Financial has also been offering strategic and technical support to the company. Paytm has recently crossed 100 million Paytm Wallet users who carry out over 75 million transactions every month.
Post this transaction, the Alibaba group will hold 40% stake in the Vijay Shekhar Sharma-led company, making it the largest shareholder in Paytm. Multi-stage fund SAIF Partners, Paytm’s early investor, will see its stake trim down to 30%, while Paytm’s founder and chairman Sharma would hold 21% stake post the new financing round, down by 6%.
Commenting on the deal, Daniel Zheng, Alibaba CEO said, “India is an important emerging market with strong e-commerce potential, and we look forward to partnering with Paytm to deliver innovative products and services to consumers. This investment will further expand Alibaba Group’s global footprint to India’s thriving mobile commerce market.”
“Ant Financial has worked seamlessly with Paytm in the past few months and our technical teams have developed significant improvements on the user experience for Indian consumers. Ant Financial and Paytm will collaborate to capture mobile payment opportunities in India.”, said Eric Jing, President of Ant Services.