Delhi-based One97 Communications, which runs mobile payment and ecommerce platform Paytm, has received Rs 400 crore ($60 million) from Taiwanese semiconductor maker MediaTek’s Mountain Capital Fund, reported the India Times. The deal, which was ratified by the board of directors earlier this week, more than doubles Paytm’s valuation to over $4.8 billion. The funding will be used by Paytm expand its distribution network, by bundling the application on smartphones that use Mediatek’s chipset. Earlier this year the semi-conductor company invested in MobiKwik, the Gurgaon, India-based mobile wallet company. Alibaba and its payments affiliate Alipay, as well as the company’s earliest backer, the VC firm SAIF Partners, will provide the remaining capital in a $300 million deal, said the India Times.
“With long haul investors, Paytm is in an incredible position to provide a new paradigm of banking and financial services,” One97 Founder and CEO Vijay Shekhar Sharma told the India Times. “Even without this capital, we were sitting on a runway of 36 months…MediaTek comes with a lot of clout on mobile platform at the hardware, which is what we needed for our next level of growth.”
One97 raised about Rs 4,400 crore in 2015 from Alipay and Alibaba, who together hold about 40% stake in the company. This latest funding round of funding includes a secondary sale of shares of up to $50 million being executed to help Sharma finance his part of the investment in the payments bank to be called Paytm Payment Bank, due to launch operations in October, noted the India Times; Sharma was granted a licence by the central bank to set up a payments bank and is required to own a 51 % stake in the new entity.
By the year’s end the fintech platform hopes to increase its gross sales to $500 million a month from $300 million in July, reported the India Times, an increase driven by offline payments including movie ticketing, petrol pump payments, taxi payments and education fees.