Existing investors commit $60M to Paytm parent One97 Communications’ fresh funding

Existing investors have committed around $60 million to Noida-headquartered mobile internet firm One97 Communications Ltd as part of an impending funding round worth $150-200 million, Vijay Shekhar Sharma, One97 co-founder and chief, told VCCircle.

One97 Communications, which was primarily a mobile value added service provider now is better known for running the digital goods and services marketplace Paytm, which had initially started as a mobile & DTH recharge platform.

"$60 million is confirmed from SAIF (Partners) so far," Sharma said adding that the firm is now in talks with other investors.

"We need $150 million: however, the offers have gone up to $250 million. But since our business model doesn't require that much of money we will see how much more money will we raise," he said.

When contacted, SAIF Partners' Ravi Adusumalli, refrained from confirming the fresh investment commitment to One97 Communications and replied that there is no imminent funding round.

Founded in 2000, One97 Communications is a leading mobile-internet company in India that offers digital goods & services to its mobile consumers under the Paytm brand. It also provides mobile advertising, marketing and payments for merchants.

The company had previously raised funding from SAIF Partners, Intel Capital and Silicon Valley Bank, which had put in over $28 million in separate funding rounds.

One97 had earlier filed to go public four years ago, where it sought to raise Rs 120 crore. It had received a go-ahead from the market regulator SEBI and had originally planned to list by December 2010. But in the backdrop of increasingly volatile stock markets and due to the company’s increased focus on the mobile internet space, it had shelved the IPO plan and decided to rope in a PE investor.

It had raised  $10 million in its third round of funding from SAP Ventures in 2011, the corporate venture capital arm of the software-maker SAP AG. The company’s valuation during this round was nearly $300 million.


The company shared various data points on the performance of Paytm while saying it is targeting total value of transaction on its platform to hit $1 billion for the year ending March 31, 2015. Indeed bulk of this would be from its recharge business which is a high volume low margin business.

It said Paytm is adding 2 million wallets per month and has 15 million active wallets within 10 months of launch of which 6.5 million with money (balance) or saved cards, showing serious active user base.

The firm is now targeting 50 million wallets by March 2015 and 100 million wallets by December 2016.

It is also in talks with e-commerce giants Flipkart and Amazon and government's ticket booking website IRCTC to provide its platform to facilitate payment.

The firm claims it has just crossed a milestone of having over 10,000 vendors on its marketplace with 78 per cent growth month-on-month. The firm is now targeting to have 1 million merchants on its platform in the next two years.

The company's Paytm marketplace saw monthly transaction volume of 17 million last month having grown 11 per cent month-on-month since January 2014 when the Paytm wallet was added. The gross transaction value on the marketplace hit $47 million in October having growth 15 per cent since the beginning of this year.

The company, which currently is at a annual gross transaction value run rate of $600 million, is also targeting to hit a milestone of $1 billion by March 2015, which would mean it is looking to hit monthly transaction value of over $83 million by March 2015.

It is also targeting 1 million orders per day on Paytm by 2015; it currently has 800,000 orders a day.

However, it says that even now, it gets 80 per cent of its businesses from recharge and utility bill payments and 20 per cent from the rest.

The company is also on a massive hiring spree and plans to add 2,000 people by the end of 2015 to its current employee strength of 1,600.

It has also taken a new half-a-million square feet office to accommodate the fresh hiring, almost double the size of its current office in Noida.

Even as mobile commerce is a fast growing segment, the company says it is going to be payment driven business, then become a marketplace business.

(Edited by Joby Puthuparampil Johnson)

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