Chinese e-commerce giant Alibaba and its affiliate Ant Financial are to make a “strategic investment” believed to be worth some US$680m in Indian mobile payment platform Paytm through an agreement with its parent company One97 Communications.
“Ant Financial made its initial investment in Paytm in February 2015, while Alibaba will become a new investor in Paytm after the completion of the transaction,” Alibaba says. “The fresh capital infusion will allow Paytm to achieve scale and develop its vibrant mobile commerce and payment ecosystem in India.
“Investing in Paytm will enhance the ability of Alibaba and Ant Financial to tap opportunities in India’s fast-growing mobile e-commerce marketplace and digital finance industry. Ant Financial and Paytm will continue to capitalize on opportunities in mobile wallet to offer Indian consumers comprehensive products and services and to tap the significant potential of the Indian mobile payment market.”
The sum of the investment was not disclosed but, according to India’s Economic Times, “Alibaba will pick up about 20% stake through a fresh issue of shares by investing about $680m.”
“Ant Financial has worked seamlessly with Paytm in the past few months and our technical teams have developed significant improvements on the user experience for Indian consumers,” says Eric Jing, president of Ant Financial. “Ant Financial and Paytm will collaborate to capture mobile payment opportunities in India. We believe that Paytm is best equipped to build a mobile payment ecosystem in the country.”
“Paytm is building India’s most dominant mobile payment and commerce ecosystem,” adds Vijay Shekhar Sharma, founder and CEO of Paytm. “With the Alibaba and Ant Financial partnerships, we look to bring half a billion Indians to the mainstream economy and help millions of small businesses leverage this large m-commerce opportunity.”
Paytm now has more than 100m Paytm Wallet users who carry out over 75m transactions every month, according to the company. Ant Financial’s mobile payment platform Alipay is accepted in more than 200,000 offline retailers and eateries across China and another 30,000 shops in Seoul, Korea, Hong Kong, Singapore, Japan and Germany.