Alibaba Group Holding Ltd. and its financial-services affiliate Temasek Holdings have plans to invest USD 575 million in the Indian e-commerce company and digital payments company, One97 Communications Ltd. Post this round of funding the company would be valued around USD 2 billion.
In a report by the WallStreetJournal, a source familiar with the matter says that the deal would give Alibaba and Zhejiang Ant Small & Micro Financial Services Group a combined 30% stake in One97 Communications. The company’s founder and chairman Vijay Shekhar Sharma will dilute his shares to accommodate these new investors, while its existing investor SAIF Partners will participate to maintain its 40% equity level.
The company which started out as a recharge and bill payment service company, opened up it own e-commerce marketplace in early 2014. These funds will be used for growing Paytm’s user base, for improving technology for mobile operations, a platform for aggregating courier companies and marketing activities.
If and when this deal will take place, Paytm will take its position among the few Indian startups which have crossed the billion dollar valuation mark.
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