eBay in talks to lead up to $170m investment in Indian online retailer Paytm Mall

Vijay Shekhar Sharma at the Asia PE-VC Summit 2018 organised by DEALSTREETASIA

US e-commerce giant eBay is in discussions to lead a $160-170 million strategic investment in online retailer Paytm Mall as it eyes opportunities in offline-to-online commerce and payments space in India, The Economic Times reported on Monday.

Paytm founder Vijay Shekhar Sharma had secured the board’s approval to bring in a new strategic investor in December last year, as the firm did not expect a fresh capital infusion from existing investors Alibaba and SoftBank.

The investment, which could be eBay’s third bet in India after Flipkart and Snapdeal, is likely to be announced next month. The US e-commerce company will, however, continue to run its independent online portal in India, the report said citing sources.

eBay had exited its investment in Flipkart for about $1.1 billion in May last year when the latter was acquired by US retail giant Walmart in a $16-billion deal. In 2017, eBay had sold its India operations to Flipkart and took a minority stake in the Indian e-commerce major. At the time of exiting, it reportedly held a 6.55 per cent stake in Flipkart. It still holds around 5 per cent stake in Snapdeal. Last year, eBay also announced its plans to relaunch its India operations.

Paytm Mall, which competes with Flipkart and Amazon in the e-commerce space in India, had raised about Rs1,500 crore from Japan’s SoftBank Group Corp. and existing investor Alibaba Group Holding Ltd in June last year, as part of the Rs3,000 crore funding commitment that was initially announced in April. The investment had then reportedly valued Paytm Mall between $1.6 billion and $2 billion.

According to Crunchbase, the online retailer has raised about $645 million in funding to date.

Paytm Mall, operated by Paytm E-Commerce Pvt. Ltd, had also set up a wholesale entity for its e-commerce business last year to avoid losing market share to rivals Amazon and Flipkart. Both the companies use their wholesale units as distribution channels that source products from brands directly and then supply these to third-party vendors to sell on their online marketplaces.

In terms of market share, Paytm Mall is still a distant third to Amazon and Flipkart, which together hold an over 80 per cent in the country.

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