Paytm has announced new funding from existing shareholders like SoftBank Group Vision Fund and new investors, as competition in India’s digital payments and finance sector heats up.
Though the company did not disclose details, it raised $1 billion in equity at a $16 billion valuation, according to a person familiar with the matter. It is in talks for another $1 billion in debt, the person said, asking not to be named because the specifics are private.
Paytm founder Vijay Shekhar Sharma is trying to fend off competitors in a payments market that could reach $1 trillion by 2023, according to Credit Suisse. Google and Walmart owned Flipkart’s PhonePe are among the rivals vying for young, smartphone-savvy users who are turning to new apps for easy digital payments.
Vijay Shekhar Sharma said the firm will use the fresh capital to court merchants as the company looks to expand its presence among small and medium-sized businesses. The company will also work on expanding its financial offerings such as lending and insurance. Paytm, which also offers its mobile wallet service in Japan, has amassed 15 million merchants, most of whom have come online in recent years, in India, he said.
“This new investment by our current and new investors is a reaffirmation of our commitment to serve Indians with new-age financial services,” he said.
SoftBank’s Vision Fund, Ant Financial and Discovery Capital are among returning investors, while funds and accounts advised by T. Rowe Price Group are also adding to the round.
Paytm said it plans to spend $1.4 billion over the next three years on expansion. Merchants in 2,000 towns and cities already use the company’s technology.
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