SoftBank, Alibaba to infuse around $450 M in Paytm Mall

Softbank will infuse $400 million in Paytm Mall, and existing investor Alibaba will bring in the rest.

Paytm Mall, the ecommerce arm of Paytm, has received capital infusion commitment of around Rs 2,900 crore ($450 million) from Japan’s SoftBank Group and existing investor Alibaba Group Holding Ltd, documents filed with Registrar of Companies (RoC) revealed.

The investment commitment comes at a time when Walmart is reportedly in talks to buy a significant equity in competitor Flipkart. Last year, SoftBank's Vision Fund had invested $2.5 billion in Flipkart. The Japanese group is also one of the biggest investors Indian e-tailer Snapdeal.

of the planned fund infusion, Softbank will put in $400 million, while the remainder will be brought in by existing investor Alibaba. Various media reports said the deal values the ecommerce firm at around $2 billion.

Paytm Mall claims a GMV (gross merchandise value) run rate of $3 billion and is targeting a $10-billion run rate by March 2019.

The company is betting big on its offline-to-online (O2O) strategy, which it thinks will drive growth. The company has tied up with brands like Big Bazaar, FBB, Samsung, Red Tape and others, apart from smaller ones that are popular across markets.

A Reuters report quoting a statement from Softbank, said, “We believe Paytm Mall’s offline-to-online operating model, combined with the strength of the Paytm ecosystem, is uniquely positioned to enable India’s 15 million offline retail shops to participate in India’s ecommerce boom”.

It further quoted Amit Sinha, Chief Operating Officer of Paytm Mall, as saying that the company would deploy the latest investment from SoftBank and Alibaba to beef up its technology and build superior logistics, among other things.

The Reuters report also stated that Alibaba.Com Singapore E-Commerce Pvt Ltd, which currently owns 36.3 percent in the firm, will remain the single-largest shareholder of Paytm E-Commerce, but with a relatively smaller stake of just over 30 percent after this latest investment round.