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Paytm Valuation May Rise to $10 Bn Post Sale of Secondary Shares: Report

Paytm Mall.

Paytm Valuation May Rise to $10 Bn Post Sale of Secondary Shares.

Digital Payment firm Paytm may witness a sharp rise in its valuation post sale of its secondary shares, which will further consolidate Noida based firm’s status as the second most valued Indian startup. The sale of secondary shares will be initiated, after existing and ex-Paytm employees will sell part of their stake to new investors, according to sources. The sale of stake will reportedly fetch $50-70 million for the company’s employees.

As per unconfirmed reports, name of one of the new investors is Discovery Capital (based in Canada) while details of other investors is still not known. If sale proceedings of secondary shares do go through as planned, Paytm’s valuation may rise nearly 43% to touch $10 billion valuation mark.

This obviously will be a new high for the Noida based firm, which was valued roughly at $7 billion during its last fund raising in May last year, when it raised nearly $1.4 billion from SoftBank. The other investors that participated in this round were SAIF Partners, Alibaba Holding Ltd and Ant Financial Services Group.

Unlike Flipkart (which is India’s most valued startup), Paytm has rarely faltered in its long-drawn path to profitability. In fact, last year proved to be a watershed year for this Noida based startup as the company saw its business roaring in the wake of massive demonetisation exercise. Last year also proved to be historic, after company launched its first payment bank branch in Noida and also diversified its e-commerce business into a new entity called ‘Paytm Mall.’

Today Paytm, over all, is one of the few bright spots in the Indian startup ecosystem, which is currently going through a tough transition phase. A cursory look into MobiKwik, one of Paytm’s closest competitors, will give a quick understanding how tough it is for startups to survive in today’s hostile environment.

Despite an unprecedented boom in digital payment last year, MobiKwik recently reported 16% increase in yearly losses as for the year ended March 2017. The company’s declining profit and revenue has shrunk its valuation to nearly $279 million, which is awfully low compared to Paytm’s valuation.

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