Paytm Raises $1.4 Billion From Softbank; Doubles Valuation In Eight Months

India’s biggest payments startup has a big new investor.

Paytm CEO Vijay Shekhar Sharma has confirmed that Softbank has made a “large investment” in the company. Sharma posted pictures with a smiling Softbank founder Masayoshi Son with the caption “from an inspiring meeting in Delhi to announcing a large investment today.” He added the hashtag #goBig for good measure.

 

Paytm certainly is looking to go big. This investment had been speculated for a while, and Paytm has confirmed that it’s to the tune of $1.4 billion (Rs. 9,000 crore). The investment will value Paytm at between $8 and $9 billion, close on the heels of Flipkart, which is currently India’s most valuable startup with a valuation of $11.6 billion. Paytm has seen its valuation nearly double in eight months; it had last raised money at a $4.8 billion valuation in August last year.

Softbank is no stranger to Paytm — it has a near 28% stake in Paytm’s largest investor, Alibaba. But with this investment, Softbank has further consolidated its position in the Indian startup space.  Softbank has invested nearly $2 billion in Indian startups, but has also seen some failures. Some of its early investments, like Housing.com performed poorly, while Snapdeal and Ola, two of its biggest bets, have seen their valuations fall over the last year. Some of its other investments, such as Grofers, are also seen to be struggling, after having severely curtailed operations.

But Softbank now backs Paytm, which is arguably the brightest star in the Indian startup ecosystem at the moment. It is one of the few unicorns which hasn’t seen its value fall over the last year – others like Fipkart, Snapdeal, Ola and Zomato have all had their valutations slashed, but Paytm has gone from strength to strength, buoyed by the government’s demonetization move and solid execution. 

Paytm, too, would be glad to have Softbank in its corner. Softbank has a nearly limitless access to capital, having invested $20 million in Alibaba in 2000 and turned it into $58 billion when the company went public. Its financial might will help fueling Paytm’s ambitious plans. Vijay Shekhar Sharma is looking to expand Paytm beyond India, having already started operations in Canada, and has repeatedly said that he wants to build it into a $100 billion company. And with a backer like Softbank, he might be well on his way.