Paytm Mall, e-commerce division of digital wallet firm Paytm, got a huge funding boost on Monday after SoftBank and Alibaba committed to pump in 2892.5 crore (around $446 million) in the online shopping startup. The latest funding round will reportedly value Paytm Mall at roughly $1.9 billion (Rs 12,300), making the Gurugram startup a new entrant in the coveted unicorn category.
The funding will happen in four tranches, with the first tranche already been allotted to Paytm Mall, according to sources familiar with the matter. Japanese investment giant Softbank will contribute Rs 2,600 crore in the round while rest of the contribution will come from Alibaba.
Commenting on the investment, Amit Sinha, chief operating officer at Paytm Mall said: “This latest investment led by Softbank and Alibaba reaffirms the strength of our business model, growth trajectory, execution capability and the potential of India’s massive O2O model in the retail space.”
The investment will also give SoftBank a deep presence in the Indian e-commerce sector. The Japanese investment giant is already the largest stakeholder in Flipkart. However, its stake in the Bengaluru based startup may get diluted substantially in coming months if reports of Wal-Mart seeking investment in Flipkart turns out to be true.
Latest Funding Round marks rise of Paytm Mall
Buoyed by the latest funding round, Paytm Mall will surely fancy its chances to give a more tough fight to Flipkart and Amazon. Paytm Mall, ever since its inception in 2016, has steadily emerged as a respectable competitor to Amazon and Flipkart. Unlike both these e-commerce giants, Paytm Mall offers online shopping services only through its dedicated mobile app.
Owing to its different business model, Paytm Mall has certainly earned a niche for itself in the highly competitive e-commerce market. The startup also boosts good numbers and tractions, with the company claiming that its GMV (gross merchandising value) has touched the run rate of $3 billion. It is now aiming to push the GMV towards the run rate of $10 billion by 2018-19.
Paytm Mall’s increasing popularity has also given the firm a default third position and consequently making the e-commerce market a three horse race competition. Previously, this third position was loosely held by Snapdeal but its downfall last year certainly seems to have paved the way for Paytm Mall’s rise.