Home Funding Paytm acquires a funding of US$1.4 billion from SoftBank.

Paytm acquires a funding of US$1.4 billion from SoftBank.

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Paytm acquires a funding of US$1.4 billion from SoftBank.
SoftBank Group Corp Chairman and CEO Masayoshi Son (L) with Paytm founder Vijay Shekhar Sharma after announcing Rs 9,000 crore investment in Paytm, in New Delhi (Photo: PTI)

Recently Paytm announced of bagging a huge amount of US$1.4 billion as funding from SoftBank for One97 communication which happens to be its parent company. This investment is being considered as the biggest funding carried out by any single investor by far.

Paytm intends to use this funding in expansion and growth of its leadership towards improving India’s payment ecosystem. Furthermore, the funds acquired will be used in the expansion of Paytm’s user base along with building a variety of financial services and products to cater to the needs of Indian customers.

It must be known that in a recent change, Paytm has divided its giant company into two. One is the Paytm Ecommerce and the other one is Paytm Payments Bank. Paytm has always been backed by Alibaba, the Chinese giant of the ecommerce world. It also invested fresh funding of US$200 million in Paytm to get a competitive edge from its global rival Amazon and Indian rival Flipkart of the e-commerce field. Flipkart has been giving tough competition to its competitors and moved a step forward by acquiring funds worth US$1.4 billion from Tencent, the Chinese rival of Alibaba.

The investment acquired through Softbank will help Paytm in reducing its dependency on Alibaba. It will also assist in allaying the concern of people regarding excessive Chinese influence on sensitive areas of financial services and payments. Furthermore, it will help it in strengthening its roots of banking in India. In this context, it has acquired its license regarding its payments bank which allows customers to enable large amounts of payments. However, this special entity is restricted when it comes to distributing loans. This biggest investment done by Softbank is surely going to help Paytm achieve its long term objective and goals.

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