Paytm Mall is pursuing discussions with Japanese investment conglomerate Softbank for leading investment of nearly $500 – 600 million, sources close to the matter claimed. They have further claimed that Japanese giant has agreed to pour in only $300 million in the newly created e-commerce vertical. Paytm Mall was demerged from the digital payment firm Paytm last year and officially launched as app only online shopping service earlier this year.
It is learnt that Paytm Mall’s parent company One97 Communication has still not formally discussed SoftBank’s funding proposal with the board members. Close sources inform that the shareholders want to set a correct valuation for the company for SoftBank transaction. If SoftBank does roll in with the investment, then the Japanese giant may very well emerge as a new invincible player in India’s fast-growing e-commerce market.
It is already the biggest investor in Flipkart and Snapdeal, which probably makes SoftBank the biggest investor in India’s e-commerce space. As for SoftBank’s potential conflict of interest visa via its investment in Paytm Mall is concerned, then sources argue that Paytm’s business model and target consumer differ greatly from that of Flipkart and Snapdeal.
Interestingly, SoftBank also owns 20 percent stake in One97 Communication. One97 Communications founder & CEO Vijay Shekhar Sharma has so far refused to comment on Japanese giant’s new funding proposal.
Since its inception as a standalone e-commerce player this year, Paytm Mall has clearly stepped up the pressure on Flipkart and Amazon. It is really trying hard to cash on the novelty of being the only app driven e-commerce player in the market. The company has also sharpened its focus on second and third tier cities in search of new markets.
The company counts big names like Alibaba and Saif Partners as its major investor. Both invested nearly $200 million in the company last year, with Alibaba holding 50 percent stake in the online market place.