India: SoftBank sets IPO as criteria for financing Paytm’s $1b round

Japanese conglomerate SoftBank has agreed to invest in Paytm’s latest $1-billion funding round on a condition that the Indian digital payments company should target to go public within the next five years from the time of completion of the transaction.

According to a report in The Economic Times, if the initial public offering (IPO) does not take place within the stipulated time period, SoftBank, which is already an investor in Paytm, will have the right to sell its stake to a rival company.

The new $1-billion funding round is being led by US asset manager T Rowe Price, which is expected to infuse $150-200 million in One97 Communications, the parent company of Paytm. SoftBank, too, has signed the funding documents on the aforesaid condition. The financing, which is expected to value Paytm at $13-15 billion, may also see participation from China’s Alibaba Group affiliate Ant Financial.

SoftBank first invested in Paytm in 2017, and currently holds a 19 per cent stake, while the Alibaba Group, through Ant Financial and directly, owns 38 per cent in the company.

Globally, SoftBank has been reevaluating investments after setbacks in its marquee investments – WeWork and Uber.

“In India too, SoftBank has gone slow as far as new investments are concerned because they are spending more time on due diligence,” the report said quoting a source.

Meanwhile, speaking on the sidelines of an event last month, Paytm founder Vijay Shekhar Sharma had said that the company will consider listing only after 2021, when it is expected to start generating cash. Paytm’s losses for the year ended March’19 nearly tripled to Rs4,217.20 crore from Rs1,604.34 crore in the year-ago period.

Paytm, which is India’s most valued unicorn, raised $300 million from Warren Buffet’s Berkshire Hathaway more than a year ago. As of July 2019, Paytm has nearly 130 million monthly actives users and over 450 million registered users.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.