Paytm parent One97 talking to Temasek, Amazon & others to raise $200M

Noida-headquartered mobile internet firm One97 Communications Ltd, which has been in talks with various suitors to raise fresh money especially to boost its flagship m-com and virtual wallet property Paytm, has now identified a set of multiple financial and strategic investors including Temasek and Amazon to raise $200 million (Rs 1,260 crore), sources close to the development told VCCircle.

The firm is likely to finalise the deal this month itself. It would also mark a fresh round of funding for the firm after almost three-and-half years.

One of the sources quoted above said it is in advance discussions with Singapore's state-owned investment firm Temasek, global e-commerce firm Amazon and private equity firm General Atlantic.

Temasek had last year backed Snapdeal. For General Atlantic, which was in talks to invest in Flipkart almost four years ago but had let the opportunity pass, this would be the first significant exposure to the fast growing e-com space in India.

For Amazon, this would be a significant strategic move in a market where it is fighting a pitched battle with Flipkart and Snapdeal. It would also mark the second such significant strategic investment in India from a global e-com major. eBay is an existing investor in Snapdeal.

“Multiple investors along with existing ones are likely to come in and invest $200 million,” said one of the sources cited above. This deal is likely to value the company at more than $750 million, he added.

The firm has also applied for 'payments banking' licence and part of the funds raised would be used to double its reach in India with investments in technology and customer acquisition.

When contacted, the spokesperson of Temasek declined to comment whereas email queries sent to General Atlantic and Amazon and One97 did not elicit any response.

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

The firm had initiated talks with investors last year. In a previous interaction, co-founder and CEO of One97, Vijay Shekhar Sharma, had said that existing investor SAIF Partners has committed to invest around $60 million while unnamed investors had offered to invest up to $250 million.

As per previous media reports it was in talks with Japan’s SoftBank, Google Capital and Atlantis Capital among others for the new funding.

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. It also has a partnership with existing lead investor SAIF Partners where it invests in early stage mobile internet startups through One97 Mobility Fund.

The company had previously raised funding from SAIF Partners, Intel Capital and Silicon Valley Bank, having raised around $30-40 million over several 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 it had decided to shelve the proposed domestic IPO plan and decided to rope in a new private investor.

One97 had raised $10 million in its third round of funding from SAP Ventures in 2011, the corporate venture capital arm of German software giant SAP. The company’s valuation during this round was nearly $300 million.

(Edited by Joby Puthuparampil Johnson)

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