Published: Wed, April 04, 2018
Industry | By Dora Warner

Paytm Mall Announces Funding From SoftBank, Alibaba

Paytm Mall Announces Funding From SoftBank, Alibaba

Online retail firm Paytm Mall has received a capital commitment of about Rs2,900 crore (about $450 million) from Japan's Softbank Group Corp. and existing investor Alibaba Group Holding Ltd in a new round of funding that will come in four tranches, official documents show. "The funds will be deployed for empowering the shopkeepers with technology, building superior logistics, strengthening the Paytm Mall brand and bringing an enriching experience to the customers".

Softbank Vision Fund (SBVF) and GCL Group holding company have signed a memorandum of understanding (MoU) to launch a US$930 million joint venture in the Indian state of Andhra Pradesh, primarily to manufacture PV ingots, wafers, solar cells and modules.

Alibaba (NYSE:BABA) pitched in $45M in the round as a return investor.

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According to two sources close to the matter, the deal values Paytm Mall somewhere between $1.6 Bn-$2 Bn. Later in December 2017, it was reported that Paytm was planning to invest around $2.5 Bn in its ecommerce arm within the next three to five years. Paytm Mall directly competes with Flipkart. SoftBank is also an investor in Paytm, while online retail rival Flipkart also received funding from the Japanese company previous year.

The investment will also give SoftBank a deep presence in the Indian e-commerce sector. Meanwhile, SoftBank and Ebay have written off their investment to Snapdeal. Previously, this third position was loosely held by Snapdeal but its downfall past year certainly seems to have paved the way for Paytm Mall's rise.

Paytm Mall reportedly has a run rate of $3 billion in GMV and aims to reach a run rate of $10 billion by the end of FY19.

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The company is betting big on its offline-to-online (O2O) strategy, which it thinks will drive growth.

Owing to its different business model, Paytm Mall has certainly earned a niche for itself in the highly competitive e-commerce market.

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