PayTM and Softbank reportedly in talks for funds infusion

PayTM, the online marketplace and digital wallet startup, is in advanced talks with Softbank to raise a massive $1.2-1.5 billion capital at a valuation of $7-9 billion. The deal will see SoftBank buying some shares from existing Paytm investor SAIF Partners and founder Vijay Shekhar Sharma as well as investing money in the company. If the deal goes through, then Softbank will become one of the largest shareholders in the domestic startup reducing the control of China’s Alibaba Group Holding, and thus allaying Government of India’s concerns about a possible control of Chinese firm on domestic payments bank.

Incidentally, Softbank is also a major investor in Alibaba with ~$60 billion worth of shares. The investment firm is also a major stakeholder in Snapdeal, the e-commerce player, and is currently in discussions with Flipkart for a possible merger of the two e-commerce giants.

Paytm’s owner One97 was valued at ~$5 billion in August’15 when the company raised $60 million from Mediatek. Its valuation jumped to $6 billion in March’17 when three existing investors—Reliance Capital, SVB (Saama Capital) and SAP Ventures—sold their combined stake of about 4.3% to Alibaba and Ant Financial.