Digital payment major Paytm is set to touch $10 billion valuations as existing and former employees are reportedly selling their equity at aforementioned valuation through a secondary sale. The secondary sale is said to be in tune with $50-70 million.
A slew of new investors are participating in the secondary sale including US-based hedge fund Discovery Capital, reports Mint. The Softbank-backed company was valued $7 billion during last financing round. It had raised staggering $1.4 billion in May last year.
In case the secondary sale goes through, Paytm will be the second startup to become decacorn. Decacorn is referred to privately held startups that are valued $10 billion and beyond. Currently, Flipkart is valued at $12.6 billion.
Besides payment, Paytm also has payments bank and e-commerce units. Recently, it had incorporated fourth company – Paytm Money with an initial investment of $10 million. It will offer financial services such as mutual funds, SIPs and among others.
Currently, it’s in the process to get the regulatory nod from Securities and Exchange Board of India (SEBI) to act as an investment advisor for users buying financial services. The new entity is slated to commence operations from coming March.
Secondary sale or buying off employees ESOPs have not been a trend in Indian startup ecosystem. However, this has changed in the past one year. Acquisition of Citrus Payment by PayU facilitated many employees to become a millionaire. Softbank had bought $2 billion worth shares of existing investors as well as employees in Flipkart.
Flipkart had repurchased employee stock options (ESOPs) of worth $100 million from over 3,000 present and past employees, including Myntra and Jabong in December last year.
Tiger Global, Accel, IDG and Kalaari Capital, along with a few others investor had sold out their shares to Softbank in a secondary round at Flipkart.
Meanwhile, the Masayoshi Son-led investment firm also bought the share of homegrown ride-hailing behemoth Ola in a secondary transaction. Tiger Global managing partner Lee Fixel had stepped down from the board of Ola as the hedge fund has partially exited from the Bengaluru-based company.