eBay Picks Up 5.5% Stake In Paytm Mall In Fresh Bet On Indian E-Commerce
After backing Snapdeal and Flipkart, online marketplace eBay Inc. has made another attempt to get a slice of the Indian e-commerce market.
eBay, founded by billionaire Pierre Omidyar, has picked up a 5.5 percent stake in Vijay Shekhar Sharma’s Paytm Mall, Devin Wenig, chief executive officer at the San Jose-based company, said in an investor call while announcing its second-quarter results.
eBay’s global inventory will be available to the users of Paytm Mall, Wenig said, adding it will also open a store on Alibaba Group Holding Ltd.-backed firm’s platform.
While eBay did not disclose the investment amount, two people aware of the development told BloombergQuint that it’s investing around $150 million as part of the deal. The transaction values Paytm Mall at about $3 billion, the first person quoted above said requesting anonymity.
Paytm didn’t immediately respond to BloombergQuint’s email seeking comments.
eBay’s investment comes at a time Vijay Shekar Sharma’s two-year old e-commerce venture is floundering in India’s highly-competitive e-commerce market dominated by Amazon India and Walmart Inc.’s Flipkart.
Paytm Mall’s market share fell to 3.4 percent in 2018 from 5.6 percent in 2017, according to a report by Forrester Inc. Still, Paytm Mall has been trying to get back into the business through a slew restructuring such as cutting down cashbacks and closing its fulfilment centres.
Paytm Mall is eBay’s third investment in India more than a year after it sold its stake in Flipkart—India’s largest online retailer—post its acquisition by Walmart. Prior to that, eBay had backed Snapdeal in 2013, but wrote off its investment in the e-tailer last year.
Launched in 2016, Paytm Mall was carved out of parent Paytm’s payments business into a separate entity under Paytm E-commerce Pvt. Ltd. In just two years, it raised more than $645 million from SoftBank Group Corp. and Alibaba Group Holding Ltd. at a valuation of more than $2 billion.
Paytm Mall’s revenue rose to Rs 744.15 crore in the financial year ended March 2018 from Rs 7 crore in FY17, according to its filings with the Registrar of Companies. Its net loss, however, widened to Rs 1,787 crore in 2017-18 from Rs 13.6 crore in FY17—it was operational for only seven months then. Paytm Mall is yet to report financials for the year ended March 2019.