Paytm Gets $1 Billion Funding To Defend Its Turf In India’s Crowded Payments Market
Paytm said it will use the money to bring financial inclusion to more underserved users in the country.
Mobile payments firm Paytm said it has raised $1 billion in a fresh funding round from existing investors, including Japan’s SoftBank Group Corp. and China’s Ant Financial Services Group, giving it the much-needed firepower to defend its turf in India’s fast-growing but crowded payments market.
T. Rowe Price Associates, Inc., the Baltimore-based investment management company, participated in the round as a new investor, while Discovery Capital, another existing investor, also pumped in money in the Noida-based digital payments firm, Paytm said in a statement on Monday.
Paytm, which expanded aggressively on the back of cashbacks to smartphone-savvy users, allows customers to invest in mutual funds, buy movie tickets, pay electricity bills, among others.
The decade-old-firm, which launched its wallet business in 2014, is raising capital to protect its turf from new entrants like Google Pay, Amazon Pay and Flipkart’s PhonePe, who have aggressively expanded their share in India’s payments market.
Paytm said it will use the funding to bring financial inclusion to more underserved users in the country. And, to do that, it intends to spend nearly $1.4 billion in the next three years, the company said, without sharing more details.
“At Paytm, we are committed to bringing half a billion Indians to the mainstream economy by onboarding them in the formal financial ecosystem,” Vijay Shekhar Sharma, founder and chief executive officer at Paytm, said in the statement on Monday.
To be sure, Paytm has already raised nearly $2.2 billion prior to this round, as per data available on Crunchbase.
On a consolidated basis, net loss of One 97 Communications Ltd.—Paytm’s parent company—stood at Rs 4,217 crore in the year ended March 2019. That’s more than double the losses it reported in the previous financial year.