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Alibaba Group, arm to invest in Paytm

Chinese e-commerce giant Alibaba Group and
its payments arm Ant Financial Services Group are investing an undisclosed
amount in online payments processor and marketplace Paytm, the companies said
in a statement.

 

The news comes nearly a month after
Alibaba pumped in millions of dollars in Paytm’s peer and India’s
second-largest e-commerce firm Snapdeal.

 

Chinese e-commerce giant Alibaba Group and
its payments arm Ant Financial Services Group are investing an undisclosed
amount in online payments processor and marketplace Paytm, the companies said
in a statement.

 

The news comes nearly a month after
Alibaba pumped in millions of dollars in Paytm’s peer and India’s
second-largest e-commerce firm Snapdeal.

 

While this is Alibaba’s first direct
investment in Paytm, its affiliate Ant Financial in February committed to buy a
26% stake in Paytm for about $575 million, in a move to tap the fast-growing
mobile payments business in the country.

 

“India is an important emerging
market with strong e-commerce potential, and we look forward to partnering with
Paytm to deliver innovative products and services to consumers. Supporting the
success of local home-grown entrepreneurial companies has long been an important
part of Alibaba Group’s globalization strategy. This investment will further
expand the group’s global footprint to India’s thriving mobile commerce
market,” Daniel Zhang, chief executive officer of Alibaba Group, said in
the statement.

 

Paytm, which received a payments bank
licence from the Reserve Bank of India in August, will use the fresh
capital to invest in marketing, technology and talent.

 

“Ant Financial and Paytm will
continue to capitalize on opportunities in mobile wallet to offer Indian
consumers comprehensive products and services, and to tap the significant
potential of the India
mobile payment market,” the two companies said.

 

Alipay Singapore E-commerce has already
pumped $200 million into Paytm in two tranches of $65 million and $135 million
for a stake of 25.88%.

 

“… With the Alibaba and Ant
Financial partnerships, we look to bring half a billion Indians to the
mainstream economy and help millions of small businesses leverage this large
m-commerce opportunity. This investment by Alibaba and Ant Financial is a
reaffirmation of their belief and commitment to the long-term Paytm
opportunity,” said Vijay Shekhar Sharma, founder and chief executive
officer at Paytm.

 

According to Paytm, it recently crossed
100 million Paytm wallet users who carry out over 75 million transactions every
month.

 

The company expects the number of wallets
to cross 115 million by December. In April, Paytm said it is looking to cross
monthly annualized sales of $4 billion in gross merchandising value by
December, with nearly half of it coming from its marketplace business.

 

Paytm has 80,000 merchants on its platform
and is expecting to touch close to 100,000 by the year-end, after it allows
zero-commission listings. 

 

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