Alibaba to invest ~INR1,700 crore in PayTM in latest round of funding

PayTM, one of the largest online retail marketplace and a pioneer in digital payments in India, is expected to get ~INR1,700 crore funding from its Chinese partner Alibaba. Both Alipay, Alibaba’s payment affiliate, and SAIF Partners have participated in the investment round, and valued the Ecommerce startup at more than $1 billion. PayTM’s parent One97 Communications was valued at ~$4.8 billion in 2016, and the latest investment round is for PayTM Ecommerce, the online marketplace division which sprung off from the parent firm. The Alibaba-Alipay combine will now own more than 50% in the marketplace unit.

Alibaba, world’s largest ecommerce firm, has been eyeing a market share in one of the world’s most attractive markets for online retail which his estimated to be ~$14-16 billion by the end of 2016. Earlier, Alibaba was widely expected to begin business in India as Tmall, its business-to-consumer brand in China, to differentiate its business from PayTM’s digital payment brand. But the online retail marketplace will now continue under the PayTM brand instead.

One97 Communications, the parent firm, started the reorganization process in August’16 into two distinct units i.e. the payments banks “PayTM Payments Bank Limited” and the online marketplace “PayTM E-Commerce”.