Indian digital payment company Paytm is said to be nearing a deal to secure $2 billion in new funding from investors including Alibaba affiliate Ant Financial and Japanese conglomerate SoftBank Group, according to Bloomberg.
Why it matters: India has become fintech’s fastest-growing market, overtaking China’s. The country’s digital payments market is expected to worth around $1 trillion in 2023. While still nascent compared with China’s $5 trillion industry, international players including Facebook and Google—blocked from China by regulators—are showing interest.
- Ant Financial has been eyeing investment opportunities in Southeast Asia to increase its global footprint and boost revenues.
Details: Talks regarding the deal are reportedly in their final stages but the terms still could change, according to an unnamed source. The new funding could value Paytm at around $16 billion, surpassing that of Southeast Asian tech super unicorns Grab and Gojek.
- Earlier this month, Vijay Shekhar Sharma, founder of Paytm, revealed in an interview the company’s intention to raise new funds. However, Sharma also said that the company will remain private for the next two to three years.
Context: Ant Financial was one of Paytm’s early backers. It has shown interest in continuing to invest in fintech startups in other markets.
- In 2015, Ant Financial invested $680 million in Paytm for a 40% share, becoming its largest shareholder.
- India surpassed China as the top fintech investment recipient in Asia in June, according to a report from CB Insights published in the second quarter. Last year, there was a significant drop-off in fintech deals in China, affecting funding activities in the rest of Asia.
- Earlier this month, Indian news outlets reported that Ant Financial was in talks to lead a $600 million funding round in Zomato, a leading food delivery startup in the country.