Paytm likely to bag $300M funding, a round led by MediaTek

Digital payments and commerce platform, Paytm is likely to raise about $300 million led by Taiwanese chip-design company MediaTek, according to media reports. Paytm is also in talks with Chinese international conglomerate and investment company Fosun, Taiwanese electronics manufacturing company Foxconn, Singapore’s sovereign wealth funds GIC and Temasek for participation in this round. The deal, which is expected to close in 30-60 days, has valued the Noida- (India) based company at $5 billion, up from an earlier valuation of about $2.5 billion May 2015. Interestingly, MediaTek has also recently invested in Paytm’s arch rival MobiKwik. In May, MobiKwik raised $50 million in its Series C round led by Japan’s GMO Payment Gateway and MediaTek. The new injection comes after Chinese e-commerce giant Alibaba Group Holding and its financial-services affiliate Zhejiang Ant Small & Micro Financial Services Group invested more than $500 million last year for a 40% stake in One97 Communication, which runs Paytm. According to filings with the Registrar of Companies, Paytm’s gross merchandise volume (GMV) has quadrupled since March 2015, when it posted a monthly GMV of about Rs 490 crore (approximately $73 million). With the fresh funds in hand, Paytm might be well able to end the startup funding drought for itself at a time when rivals are struggling to raise capital or are accepting smaller investments. Paytm recently separated its e-commerce business from the payments business. Hence, it would not be wrong to assume that the company might use the incoming funds to bolster both the businesses. The funding comes at a time venture capital investments have been slowing in the country and Indian startups are struggling to raise fresh capital valued higher than in their last rounds. If completed, the deal would be the largest startup fundraise in India so far this year, leaving behind Snapdeal’s $200 million from Ontario Teachers’ Pension Plan and Singapore-based investment entity Brother Fortune Apparel in February this year. Undoubtedly, the investment will jack up competition among the digital payments services providers that are vying to catch a bigger fish as markets observe a keen shift towards digital wallets. Update: According to news agency PTI, Paytm has confirmed to it that Mediatek has invested $60 million in One97 Communications, the parent company of Paytm.