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Paytm Mall in talks with SoftBank for Rs 3000 crore funding; valuation to reach Rs 13,000 crore

To say that the Indian online space is a battle zone very few can survive would be an understatement. Now, adding yet another big foreign player that has swooped in with all its might could alter the Indian e-commerce landscape significantly. The foreign giant that has been slowly but steadily conquering the Indian e-commerce space is Japanese conglomerate, SoftBank. After backing platforms like Flipkart and Snapdeal, SoftBank is now in talks with Paytm's e-commerce site Paytm Mall.

To take on rivals Amazon and Flipkart, Paytm Mall is in talks with Singapore's Temasek Holdings, and China's Primavera Capital Group to raise another Rs 1,000 crore, with SoftBank's Rs 3,000 crore. Once the SoftBank deal goes through, Paytm Mall is likely to be valued at Rs 13,000 crore or USD 2 billion, putting it in the 'unicorn' bracket - in other words, a billion dollar valuation startup.

Currently, Chinese e-commerce site Alibaba and its payment affiliate Ant Financial hold a majority stake in Paytm Mall. According to a report in The Economic Times, Alibaba and SAIF Partners had pumped in USD 200 million in Paytm Mall, but after this round of funding, Alibaba and Ant Financial that accounts for 55% shareholding would be reduced to a significant minority.

Paytm Mall, Alibaba, Temasek and Primavera have not given any confirmation as yet.

Paytm Mall has big plans of expanding their business as well. The segment that is likely to bring in major competition from Amazon is grocery. According to reports, while 25% of the gross merchandise value (GMV) is brought in by groceries currently, it is expected to jump up to 40% by end of the year.

SoftBank had started making inroads to the Indian online space in 2011, gradually moving in with significant stakes in OYO, Ola and Snapdeal before moving in for homegrown giant, Flipkart. The Japanese conglomerate is reportedly also in talks for follow-on funding and stake buyouts with Swiggy, Grofers and PolicyBazaar. According to reports, SoftBank had made profits of USD 74 million last year as a result of its investments in India and Southeast Asia.


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