Paytm has closed $1 billion funding led via Japan’s SoftBank Group, China’s Ant Financial and other major investors at a valuation of USD 75 billion, building its position as one of the world’s most valuable startup. Paytm said on Saturday that the amount is raised from existing shareholders as well as a couple of new investors including T. Rowe Price Associates.
The funding is aimed at an expansion into India’s hinterland amid increasing competition from other players including Google Pay and PhonePe. Further, the investments will be used for increasing the financial services business, and expand across the home country. The financial services company is also planning to invest INR 10,000 crore over the next three years to bring financial inclusion in the rural parts of the country.
Paytm presently serves merchants in more than 2,000 towns and cities spanning across 650 districts, with an aim to bring low cost mobile enabled financial services to rural India. The company further plans to invest and support millions of rural Indians towards self-sustainability through employment creation,” a company’s spokesperson said in an interview.
Paytm has plans to raise funds since early this year amid mounting losses and, rising competition in the digital payments sector.
The digital payments market in India is growing rapidly since 2015 with an average 22.4 transactions per person in the year ended 31 March, according to RBI India. Moreover, the market is expected to expand to $1 trillion by 2023, an approximate figure evaluated by NITI Aayog in 2018.
The company which faced massive of losses is trying to become a financial services organization to improve margins. According to reports, Japan’s SoftBank has been pushing the company to accelerate its spending cut and generate new revenue streams.
Paytm once a significant market player is now locked in a market share war in digital payments with Google Pay and PhonePe. Paytm which hold the largest market share once, has now fallen behind its two rivals in UPI transactions.