Paytm Parent to Raise Around USD350 Million to Double Company’s Valuation at USD5 Billion

India: One97 communications Ltd, which runs online payment service and shopping website, under its brand name Paytm is in advance talk to raise around USD300-350 million from investors including Mediatek Inc., Goldman Sachs Group Inc., and Temasek Holding Pte.

Paytm is also in talks with Taiwan’s Foxconn and Singapore’s sovereign fund GIC Pte for its latest round of funding which will more than double its valuation to USD5 billion. The deal is expected to closed in the time span of 30-60 days, if completed, bringing Paytm in the largest round of funding for any start-up this year

Taiwanese chip maker will help Paytm bundle its app with Meditek chipset fitted in mobile phones. Mediatek has around 35% of India market for processors used to power mobile phones. Alibaba and its affiliate, Ant Financial are yet to decide either to put money directly into or buy stakes in subsidiaries Paytm payment banks and Paytm E-commerce for funding.

TechSci Research depicts that with growing awareness of mobile wallet and majority of the transactions still done in cash is creating interest among investors to pump in more money in Payment banks. The companies offering mobile wallet services, like Paytm, are entering the partnership with retail outlets and other companies to power e-cash payments. Mobile wallet market in India is surging because growing online transactions, rising trend towards mobile banking, and ease of usage of mobile wallet applications.

According to the recent report published by TechSci Research, “India Mobile Wallet Market Forecast and Opportunities, 2020”, the mobile wallet market in India is forecast to reach USD6.6 billion by 2020. Growing awareness regarding the benefits of mobile wallets, rising smartphone and mobile internet penetration rates, and increasing security measures are expected to drive growth in India mobile wallet market. In 2014, Tier-I cities such as Delhi, Mumbai, Kolkata, Bangalore, Pune, etc., registered the highest number of mobile wallet users in the country, while Tier II cities such as Jaipur, Lucknow, Chandigarh, Indore, Patna, etc. are emerging cities in terms of mobile wallet usage. Banking accounted for the largest end user sector in the country’s mobile wallet market in 2014, followed by retail, telecom, and transportation sectors. Few of the leading companies operating in India mobile wallet market include One97 Communication Pvt. Ltd., MobiKwik and ItzCash.