The funding is likely to be an extension of the $1-billion financing round announced by One97 Communications, the parent of Paytm, in November last year, according to a report in The Economic Times. That round is being led by US-based global asset manager T Rowe Price, along with the participation of existing investors Ant Financial, SoftBank Vision Fund, and Discovery Capital.
“The talks with Microsoft began last year when Paytm was in the middle of raising funds. While Microsoft could not participate in the funding then, it is likely to pump in cash now,” the report said quoting a source. The deal, if goes through, will give Paytm access to Microsoft’s connectivity, computing, and storage solutions.
Meanwhile, the Series F round in November had valued Paytm at about $16 billion. Of the total $1 billion, however, Paytm has secured only about $720 million so far, the report said citing regulatory filings.
Alibaba’s affiliate Ant Financial, the largest investor in Paytm, will now have to seek approval for the proposed investment as India’s has decided to screen foreign direct investments from neighbouring countries, including China. The new rules are aimed at preventing opportunistic takeovers of Indian companies due to the current COVID-19 pandemic.
Alibaba Group, through Ant Financial and directly, owned 38 per cent of the company prior to the $1-billion funding round. Japanese conglomerate SoftBank owns just about 20 per cent in One97 Communications.
Paytm has been in the market since early 2019 to raise funds. The Vijay Shekhar Sharma-led company had raised $300 million from Warren Buffet’s Berkshire Hathaway in September 2018.