Paytm Mall had announced $150 million funding round from eBay early this month, however, the final amount comes with a top-up of $10 million taking the total to $160 million. The money was received from the Singapore arm of the US-based e-commerce juggernaut.
According to RoC filings with MCA, the Noida-based firm is issuing 1,28,028 equity shares at a price of $1249.73 per share to eBay Singapore Service Pvt Ltd. Entrackr had exclusively reported about eBay’s interest in Paytm Mall in late March this year.
A funding round worth about $200 million from eBay was expected, but contrary to what our sources at that time said about Paytm Mall going through a massive valuation haircut, did not materialize in the final deal. Post money, Paytm Mall will be valued at about $2.9 billion in this round.
In March, Entrackr’s sources had emphasised that Paytm Mall will be valued at below $1 billion. However, the estimate by our sources was way-off the actual valuation.
With this round, Paytm Mall has closed about $805 million in total funding across three rounds. eBay will be picking up 5.59% stake in the Vijay Shekhar Sharma-led company. Besides this, Alibaba’s Singapore entity will own 30.15% stake in the firm while SoftBank will account for a little over 21%.
It’s worth noting that SoftBank and Alibaba, who together own more than half of Paytm Mall, aren’t participating in this round. Many experts believe that the duo isn’t bullish on the prospect of making more investments in One97 Communications’ commerce play.
Hived off from the parent entity in late 2016, Paytm Mall took one of the shortest durations to become a Unicorn. This was achieved on the back of the tried and tested cashback model of Paytm itself, a model that failed to work for Paytm Mall.
Of late, it had cut the cashback component to a large extent and realigned its focus towards Offline to Online model (popularly known as O2O).
Early this year, Paytm Mall’s board also ordered a forensic audit on the company for a potential fraud hatched by mid-level employees.
Even with a $200 million investment, it’s unsure how Paytm Mall will compete against well capitalised Amazon and Flipkart, as well as a resurgent Snapdeal. While on one hand eBay currently lacks any material capabilities in the Indian e-commerce market, on the other hand, Paytm Mall lacks strong organic consumer demand in the country.