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Alibaba-backed Paytm Mall looks to raise over $600 mn

27 September, 2017

Online marketplace Paytm Mall, operated by Paytm E-Commerce Pvt. Ltd, has reportedly initiated discussions to raise Rs 3,000-4,000 crore ($456-608 million) in fresh funding.

The company plans to close the funding round by the end of the year and is talking to financial investors from Asia and the US, The Economic Times reported citing a person aware of the development.

The Alibaba-backed firm—widely expected to take the third spot in the country’s e-commerce market following Snapdeal’s debacle—has been aggressively scouting for buyouts and investments.

Alibaba and Paytm Mall have been looking to buy into e-grocer BigBasket for some time now. According to recent media reports, the two are set to invest about $200 million in SuperMarket Grocery Supplies Pvt. Ltd, which runs BigBasket, at a pre-money valuation of $600 million.

Paytm Mall is also strengthening its logistics network. Last month, it said it was planning to invest $35 million in its technology and logistics infrastructure, besides adding more product offerings. It also plans to cut down on delivery timelines for partner merchants. It is likely that a portion of the funds raised will go towards building its logistics infrastructure, the ET report said.

In June, Paytm E-Commerce raised $200 million from Alibaba and venture capital firm SAIF Partners. Following the transaction, the combined stake of Alibaba and its affiliate Ant Financial in Paytm E-Commerce rose from 40% to 62%.

Email queries sent to Paytm Mall did not elicit an immediate response.

Going full steam
Armed with a revamped mobile app featuring 1,000 brand stores and 15,000 brand authorised retailers, Paytm Mall has announced a Rs 100 crore advertising budget for the festive season. Overall, it has readied a war chest of Rs 1,000 crore for marketing, cash back and promotions. It is targeting $0.5 billion (Rs 3,200 crore) in festive sales.

“Paytm Mall’s first-ever [festive season] sale will boost their market share. After demonetisation, Paytm has become a decent brand in the country… They are going to be the biggest gainer in terms of market share this season,” Mrigank Gutgutia of Redseer Consulting had told VCCircle.

The report card for the season’s first sale is out, and homegrown Flipkart seems to have comfortably won the game. However, Paytm Mall is yet to announce its numbers. According to a Redseer report, e-commerce firms in India saw their best-ever performance over the five-day festive sales period in 2017, generating Rs 9,000 crore ($1.5 billion) in sales.

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Alibaba-backed Paytm Mall looks to raise over $600 mn

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