Funding News

Paytm Knocks on Microsoft to raise funds

Paytm is holding talks with U.S. based tech giant Microsoft to raise nearly $100 Mn (nearly INR 760 crore) as increasing competition from Google Pay and PhonePe forces the company to pull up its socks. According to Economic Times, which cited unidentified sources, Paytm had started talks with Microsoft last year.

Paytm’s CEO and founder Vijay Shekhar Sharma

Sources claim that Microsoft was planning to pump funds in November 2019, when Paytm had last raised funds from T Rowe Price and other existing investors. But could not do so because of unknown reasons and now wants to compensate for the same. This funding round ploughed whopping $1 Bn for the Noida based company and spiraled its valuation to $16 Bn – making it the second most valued startup after Flipkart.

Sources further claimed that Microsoft led funding will be part of the $1 Bn funding round that was initiated last year. However, there is no clarity that whether other investors will also join this upcoming funding round.

As expected, Paytm has so far remained tight-lipped over this news report. But Techpluto will be reaching out to Paytm’s team and accordingly update our readers as soon as there is confirmation from the company.

Techpluto’s Analysis  

The importance of having Microsoft as an investor goes much beyond the monetary assistance. The Redmond based tech giant may also bring its entire technological prowess for helping Paytm to withstand the competitive pressures.

Microsoft’s unparalleled superiority in computing and cloud storage is likely to help the Vijay Shekhar Sharma’s company in gaining that much needed technological edge; an edge that may aid the SoftBank & Alibaba backed company in regaining that lost mojo and achieving the level playing field with Google Pay and Phonepe.

Google Pay and Phonepe are both owned by deep-pocketed American companies, whose access to global financial markets are also quite unmatched. In such an unforgiving competitive scenario, Paytm’s new investors ought to bring more than bounty of money on the table. And probably no one fits this bill like Microsoft does.

Techpluto’s also believes that Paytm acknowledges the hard reality of no more having access to  easy capital, especially with its largest investor SoftBank finding itself in the troubled water post WeWork’s IPO fiasco. Therefore, each new investor needs to bring more than a financial muscle and that more basically accounts for technological supremacy that Microsoft promises to bring for Paytm.

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