Paytm raises $1 billion in fresh funding round led by T Rowe Price

Digital payments major Paytm has raised $1 billion in a fresh fund-raising exercise led by T Rowe Price Associates Inc, Discovery Capital and existing marque investors, SoftBank and Alibaba. According to a report by Times of India, T.Rowe Price  Associates Inc, and Discovery Capital invested $400 million while SoftBank and Alibaba put in the remaining $600 million. While SoftBank Vision Fund has invested $200 million and Ant Financial, the investment arm of the Alibaba Group has invested $400 million.

The investment was made into One97 Communications Limited, the parent company that owns Paytm.

Paytm has said that it will invest a large part of the funds now raised towards penetrating into the rural pockets in India popularizing its digital payments app and empowering the people there. The company says it will be able to generate more jobs in this process in the country’s hinterland. At the centre of this strategy is the 500-million strong base in India of internet-connected mobile phones. Paytm will try and capitalize on this base for its digital payments business.

The merchant establishments willing to accept payments through the QR-based mobile payment mode will also have to be cultivated and put in place.

Vijay Shekhar Sharma, Founder and CEO at Paytm said, "At Paytm, we are committed to bringing half a billion Indians to the mainstream economy by onboarding them in the formal financial ecosystem. This new investment by our current and new investors is a reaffirmation of our commitment to serve Indians with new age financial services."

Paytm will also try and promote its Paytm Payments Bank where it already has 50 million accounts. If the company succeeds in promoting the handheld banking services and convinces the customers through its Paytm Money to make small investments like SIP etc., it would mean a lot to the top line and bottom line for the company. Already, SoftBank is pushing all the startups that it has funded to start making profits and to enter the market with their IPOs as early as they can.

Possibly it can push its other venture, Paytm First Games also in the rural pockets. Paytm First Games is a joint venture between One97 Communications and AG Tech Holdings. It offers games such as Fantasy cricket, Rummy, Trivia etc.