India's Paytm raises $1bn with SoftBank's contribution

Indian financial technology giant Paytm has raised $1 billion in a new financing round led by U.S.-based global asset manager T Rowe Price and backed by existing investors Ant Financial, SoftBank Vision Fund and Discovery Capital, the company said Monday.

The Series G funding round values Paytm at about $16 billion and comes as the company is set to start preparations for an initial public offering in the next 22-24 months.

Ant Financial contributed $400 million, while SoftBank Vision Fund invested $200 million in the latest round. The financing sees Paytm outstripping fellow high-profile Asian startups such as Grab and Gojek in valuation and boosts the firm’s war chest to fend off an influx of new rivals.

As part of the latest transaction, SoftBank, which owns only about 20% of Paytm parent One97 Communications, will not be able to sell its stake for the next five years unless the Indian fintech firm manages to go public. One97 Communications is India’s most valuable unicorn.

After five years and if Paytm remains private, the Masayoshi Son-led firm will have the option to sell its shares to existing investors.

The Economic Times reported last week that SoftBank had agreed to invest in Paytm’s latest $1 billion funding round on condition that the Indian digital payments company conducts a public offering within five years of completion of the transaction.

SoftBank first invested in Paytm in 2017.

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Source: India’s Paytm raises $1bn with SoftBank’s contribution – Nikkei Asian Review