Payments battle intensifies as Paytm is raising $2 Bn at $16-18 Bn valuation

Yesterday Entrackr exclusively reported that eBay is pouring around $200 million in Paytm Mall at a much lower valuation of $600-800 million as compared to $2 billion in the last round.

Turns out, this was actually a part of bigger fish that Paytm is frying. According to latest media reports, Paytm is raising up to $2 billion from its major existing investors counting Masayoshi Son led SoftBank Vision Fund and Jack Ma’s Ant Financial, the payment affiliate of Alibaba Group.

One97 Communications Ltd., the entity name of Paytm, is going to be valued between $16-18 billion for this double billion round.

In the last round worth $300 million from Berkshire Hathaway and was valued at $10 billion, and in a secondary round months ago the figure had spiked up to $16 billion.

While as per ET’s source, the most probable scenario is of the round being internal funding, but there are chances that new investors also make a contribution in the round.

eBay’s funding in Paytm Mall could be a part of the Paytm’s willingness to onboard new investors.

The round is also pegged to facilitate secondary sale proceedings where one investor purchases shares from other investors.

This comes after Softbank already owns 19 per cent stake in the company, and the highest concentration of shares is in Ant Financial’s pocket - 38 per cent to be exact. With this funding, the accumulation of stake is bound to increase. And when that happens, SoftBank and Alibaba’s play in the Indian Digital Payments’ market becomes much more significant.

Yesterday itself, it was also uncovered that Flipkart has agreed to disinvest from its Payments subsidiary PhonePe as the Sameer Nigam led company looks to raise $1 billion in the capital-consuming fight with Paytm and Google Pay.

The Vijay Shekhar Sharma led company raising double of the PhonePe’s expected figure, does make things seem difficult for PhonePe. Even with that, PhonePe however, claims to be doubling the volume every three months. Meanwhile, Google Pay’s use in the country is growing at a faster pace than any other application.

If not anything, all this, especially Paytm’s latest fund seeking, just makes the Payments battle all the more intense.