Alibaba to lead $200mn investment in Paytm’s e-commerce business

Paytm E-Commerce Pvt. Ltd is close to raising 200 million in an investment round led by Chinese internet giant Alibaba Group Holding Ltd, according to an Economic Times report.

Citing two people in the know of the deal that will mark Alibaba’s formal entry into India, the report says that Alipay and investment firm SAIF Partners are also part of the deal which is expected to value Paytm’s online marketplace-newly created by One97 Communications Ltd to house the online retail business- at over $1 billion.

The new platform could be named PaytmMall—inspired by Alibaba’s T-mall in China or PayTM Bazaar and the completion of the deal is expected to be formally announced in the coming weeks. Paytm's parent One97 raised $60 million in mid-last year from Mediatek, its last funding round when it was valued at $5 billion. Alibaba and Ant Financial will have a combined 50 per cent stake in the new division after this deal, according to Mint.

Though Alibaba has time and again stressed that India offers great marketing opportunity for the company but in an emailed response to ET it refused to divulge any details regarding this particular deal.

The latest investment will give Paytm a huge war-chest to take on rivals Flipkart and Amazon — who together enjoy nearly 70 percent of the e-commerce marketshare in India — as well as Snapdeal.

Alibaba, which already runs a business-to-business platform in the country, will help Paytm in hiring more senior executive staff and will deploy some of its executives from China, one of the two people mentioned above said.

The company has already hired former Bain Consulting executive Bharati Balakrishnan as the head of its Indian operations. Balakrishnan will now work closely with the Paytm E-Commerce team and as of now Sharma will be the head of new business.