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SoftBank, Alibaba commits $445Mn Funding in India’s Paytm E-Commerce

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Published on : Apr 03, 2018

The e-commerce sector in emerging markets are attracting massive investments from multinational investors. Getting buoyant on the burgeoning e-commerce sector in India, investors are pouring in multi-million dollars in online shopping portals. India-based Paytm E-Commerce Pvt. Ltd., a prominent online retailer, in a regulatory filing made on April 2, 2018, declared that it has secured US$400 million (26.05 billion Indian rupees) of funding from SoftBank Group Corp. The investment from the Japanese multinational conglomerate values the company at US$1.9 billion. The regulatory filing also showed that Alibaba Group will commit US$45 million in the funding round. Of note, the Chinese e-commerce and retail giant is already an existing investor. SoftBank tapping avenues in the booming India e-commerce sector confirmed the investment it has made in Paytm Mall, the online shopping app and the brand name under which India e-retailer operates.

Current Investments to Help Paytm Mall fortify its Ecosystem

The recent quantum of investment will be used by Paytm Mall to bolster its technology and build on its logistics, lending competitive edge over its rivals. According to the Registrar of Companies, India, post the investment SoftBank units will be securing 21.1% stake in Paytm E-Commerce. Furthermore, the entire investment planned in four parts, will also shuffle the stake which Alibaba.Com Singapore E-Commerce currently holds in the India’s e-retailer-bringing the share from 36.3% to 30%. Still, the company will remain the largest shareholder.

SoftBank Buoyant on India’s E-Commerce Growth and Rising Online Retail Space

SoftBank, showing potential optimism in offline-to-online operating model Paytm Mall believes the soaring volume of investment will enable the Indian online retailer, equipped with Paytm ecosystem, to fuel a buoyant e-commerce sector in India

Paytm E-Commerce plans to put a stiff competition to the Indian unit of Amazon.com and Bengaluru-based e-commerce company Flipkart. Of note, SoftBank is also one of the potential investors in another Indian e-commerce company, Snapdeal.