The proposed fund raise, which may amount to around $100 million (Rs 760 crore), is likely to be an extension of a planned $1-billion (Rs 7,600 crore) fundraising that the company had initiated last year, people briefed on the matter told ET.
In November 2019, US-based asset manager T Rowe Price had come in as a new investor, ploughing $150 million (Rs 1,140 crore) into Paytm, valuing the company at $16 billion. The entire sum from this round is yet to come in, as per regulatory filings by the Noida-based firm.
“The talks with Microsoft began last year when Paytm was in the middle of raising funds. While Microsoft could not participate in the funding then, it is likely to pump in cash now,” said a person familiar with the talks.
A Paytm spokesperson declined to comment on ET’s query seeking comments while a Microsoft spokesperson said: “At this moment, we do not have any comments on your proposed story.”
In November, Paytm said it had raised $1 billion in a financing round led by T Rowe Price, with existing investors Ant Financial and SoftBank Vision Fund also participating. However, only about $720 million (Rs 5,472 crore) of that capital has so far come through, as per regulatory filings. Alibaba’s affiliate Ant Financial, the largest investor in Paytm, will now need the Indian government’s approval for the proposed investment, according to the new foreign direct investment guidelines issued by India recently.
Microsoft had earlier taken a wager on Flipkart in 2017 and has held discussions with ride-hailing app Ola for a potential fundraise. The firm also partnered with Reliance Jio for its cloud business, Azure, in August last year.
The Redmond, Washington-based Microsoft has been striking partnerships with Indian startups and technology companies as it doubles down on its cloud service and seeks to corner market share against arch rival and the largest player in this segment—Amazon Web Services. Currently, Paytm uses AWS cloud services.
The Vijay Shekhar Sharma-founded company would gain in a big way by bringing Microsoft onto its investor list as it gets access to the firm’s connectivity, computing, and storage solutions. This also comes at a time when Paytm has already been fighting a bruising online payments war with the likes of Google Pay.
Paytm has been losing ground in the Unified Payments Interface (UPI) to rivals like Google Pay and Walmart-owned PhonePe. Over the past year, the company has focussed on introducing services including payments infrastructure for offline merchants, in a bid to shore up revenues. It has also launched mutual funds, insurance, merchant and consumer lending, gaming, and advertising. These services come under the firm’s financial services division headed by Amit Nayyar while Madhur Deora leads its consumer internet arm.
ET was the first to report on T. Rowe Price leading the latest funding round at Paytm on October 15.
One97 Communications, the holding company of Paytm, clocked Rs 3,959.6 crore net loss in FY19 against Rs 1,490 crore a year earlier, according to details the company shared with investors, ET had reported in September. Its standalone revenue rose marginally to Rs 3,319 crore in FY19 from Rs 3,229 crore in the year-ago period.
The losses posted its competitors have been equally steep. PhonePe’s losses amounted to Rs 1,904.72 crore with revenue from operations at Rs 184 crore while Amazon Pay reported a loss of Rs 1,160.8 crore for FY19.
- 5 Key Takeaways From Microsoft Build 2015
- Build 2015: Microsoft's new plan to rule the mobile world
- Microsoft Office vs. Google Apps: The business brawl
- Sanity check: Could one of these five companies be the next Microsoft?
- While the cyber war tail wags the national security dog, software security offers a different path to cyber peace
- Ian Griffiths talks Windows Presentation Foundation (Part 2)
- Google, Microsoft and Apple: Which One Will Thrive?
- Interview: Microsoft's sales chief eyes challenges
- Microsoft Pays Youtubers To Promote Xbox One?
- 5 things to expect from Microsoft's Build developer conference
- How the Nokia-Microsoft Union Changes Everything
- Where is Spartan? It's not in Build 10041 of Windows 10
- A graphics library war is a win for everybody
- Windows 8: Microsoft can do it fast, cheap, or right
- The war against alternative information
- The War...on Drugs
- Why suggesting that Microsoft buy Docker is crazy talk
- How Your Business Can Avoid Being Collateral Damage In A Cyber War
- What the history of cyber war teaches us about Apple-FBI standoff and today's security nightmares
- Can PayPal Beat Apple, Google, Amazon And Icahn In The Wallet Wars
Paytm in funding talks with Microsoft to build war chest have 818 words, post on www.gadgetsnow.com at April 27, 2020. This is cached page on Movie News. If you want remove this page, please contact us.