SoftBank-Backed Paytm Raises USD 1 Billion in Fresh Funding.

Although the Indian digital payments company did not officially disclose details of the funding, the firm is expected to have raised USD 1 billion in the latest round. The fresh investment by the company’s current and new investors provides the company a chance to serve Indians with new-age financial services, further growing its business in the region.

India provides a large consumer base to the payment market due to its large youth population, thus aiding the digital wallet companies like Paytm in its growth. The India payment market has witnessed a healthy growth in the past few years due to increased adoption of M-commerce and growing smartphone and mobile internet penetration in the region. The India payment market is being aided by the growth of the global payment market, which stood at a value of nearly USD 2.1 trillion in 2018. The global payment market is further projected to grow at a CAGR of 11% over the forecast period of 2019-2024 to attain USD 4 trillion by 2024.

The company further said that it has decided to expand into insurance, lending, stockbroking, and investments. Paytm, seeing the growth potential in the Indian market is going to invest 100 billion rupees, equivalent to approximately USD 1.4 billion, over the next three years, bringing in more users to its services to enhance its business. The market in the region is being supported by the launch of various government initiatives to promote digitalisation in India, coupled with the introduction of convenient and hassle-free payment options. In 2018, in a bid to penetrate the growing payments sector in India, leading companies like Alibaba Group Holding Limited (NYSE: BABA) and Berkshire Hathaway Inc. (NYSE: BRK.B), invested in Paytm, which currently operates as the largest digital wallet company in India.

SoftBank’s decision to make fresh investment in Paytm can be seen as an attempt by the company to restore its reputation after its founder, Masayoshi Son, made an ill-fated investment in the office sharing firm WeWork. Other firms investing in Paytm include Discovery Capital and funds advised by T. Rowe Price Associates.

Paytm is a Noida-based Indian e-commerce payment system and financial technology company. The company started as a prepaid mobile and DTH recharge platform in 2010 with an initial investment of USD 2 million, and in 2013, further added facilities like data card, postpaid mobile, and landline bill payments. Paytm, available in 11 Indian languages, offers online use-cases such as mobile recharges, utility bill payments, travel, movies, events bookings, and many more using the Paytm QR code. With the growing awareness regarding the e-commerce and digital wallets in India, the region’s payment industry is further expected to witness a healthy growth.