SoftBank to lead $500-600 Mn fresh round in Paytm Mall

Continuing its investment spree in Indian startups, SoftBank is planning to lead $500-600 million in Noida-based Paytm Mall. Besides SoftBank, the company has also held a discussion with US-based investors to participate in the round.

The Japanese investment conglomerate will put about $300 million into Paytm Mall. In case the deal materializes, this would be the third investment by Softbank into online retail. Earlier, it invested in Gurugram-based Snapdeal and most recently it led humongous $2.4 billion round in Flipkart.

Paytm Mall has been scouting for fresh funding for the past two months. In October, Entrackr had reported that Paytm Mall is planning to raise $450-600 million. The development was first reported by ET.

Paytm had raised $1.4 billion from SoftBank in May this year. The investment firm holds about 20% in One97 Communications, that owns the digital payments unit Paytm and Paytm mall. Both units are independent entities.

Currently, Alibaba holds over 50% stake in Paytm Mall. Alibaba and SAIF Partners had pumped-in $177 million and $23 million respectively into Paytm Mall in March this year.

Paytm Mall's growth

During the festival season, when industry experts were assessing the winner between Flipkart and Amazon, Paytm Mall claimed to have garnered a market share of 15-20 per cent during the sales.

The company achieved 40 per cent of the total sales through online-to-offline (O2O) model and hit gross merchandise value (GMV) to an estimated $300 million.

Paytm Mall had suffered a loss of almost double the sales it made in the previous fiscal. The loss clocked was around Rs 13.63 crore on total sales of Rs 7.35 crore in the year ended March 31, 2017. The total expenditure of the company stood at Rs 20 crore, while reserves and surplus stood at Rs 1,284 crore.

Paytm in order to compete with existing players is planning to have fresh acquisitions and strengthening logistics network.

The Vijay Shekhar Sharma-led company is also eyeing to co-invest $200 million in online grocery store Bigbasket with Alibaba. It also slated to acquire struggling hyperlocal deal aggregators Little and NearBuy.