Paytm Money, the wholly owned subsidiary of Vijay Shekhar-led payments giant Paytm, is planning to raise a $1.2-billion mega funding round as it eyes expansion in the mutual funds (MF), insurance, and financial services space in 2019, Business Standard reported.
The funding round, which has received interest from Paytm’s existing investors including SoftBank Group and Alibaba’s financial affiliate Ant Financial, could spike Paytm Money’s valuation to as much as $5 billion.
The round is expected to close in the next three months.
Paytm Money has never raised funding independently till date. In March, it had raised Rs 28.87 crore (about $4 million) in fresh funding from parent One97 Communications, according to filings with the registrar of companies (RoC). The funding was reported to be part of the $10-million investment commitment secured from the parent at the time of its launch in September.
Paytm Money, which currently deals with mutual fund schemes largely, competes with the likes of Zerodha and ET Money, run by Times Internet Ltd in the segment.
However, Paytm has been looking to expand and garner more customers through Paytm Money in online insurance, and has also earmarked $150 million for acquisition deals in the space. Last year, it was reportedly in talks to acquire Coverfox for $100-120 million to put itself in competition against Policybazaar, one of the largest players in the online insurance sector.
Last month, EtechAces Marketing and Consulting Pvt Ltd, the parent of PolicyBazaar and PaisaBazaar portals, had secured about $152 million (Rs 1,059.4 crore) in the first tranche of its Series F funding round, led by Japan’s SoftBank Vision Fund.
PolicyBazaar claims to account for nearly 25 per cent of India’s life cover, and over 7 per cent of India’s retail health insurance business.