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 company will use the funds to deploy its tech for shopkeepers, enhance logistics and strengthen its brand, Amit Sinha, chief operating officer at Paytm Mall, told TechCircle.
Earlier this month, Inc42 reported that Paytm Mall is in talks with SoftBank to raise $600 Mn at a valuation of $2 Bn.
Softbank will infuse $400 million in Paytm Mall, and existing investor Alibaba will bring in the rest.
The fresh funding comes after Japanese Internet giant SoftBank pumped in a whopping $1.8 billion in One97, founded by Vijay Shekhar Sharma, which is the parent of Paytm, for about a 30 per cent stake previous year.
The deal, which marks SoftBank's first funding in Paytm Mall, will see the Japanese entity holding over 20 per cent stake after the transaction is completed. While the parent company Paytm has been busy revamping its app, it's ecommerce subsidiary Paytm Mall has secured $445 Mn in a funding round by SoftBank and Alibaba.
SoftBank, which now has an installed and under-construction solar capacity of 750 MW, itself sought very low tariffs in its last bids in May 2017, where it quoted 2.45 rupees per unit.
The investment will also give SoftBank a deep presence in the Indian e-commerce sector.
Paytm E-Commerce competes with Amazon.com's Indian unit and home-grown Flipkart. Meanwhile, SoftBank and Ebay have written off their investment to Snapdeal. Paytm Mall exited FY18 at a gross merchandise volume (GMV) run rate of $3 billion.
The company is betting big on its offline-to-online (O2O) strategy, which it thinks will drive growth.
The company now works with offline stores in partnership with brands such as Samsung, LG, Lenovo, Intel, Red Tape, Canon, HP, Godrej, Hitachi, Bluestar, Whirlpool, Bosch, IFB and Intex among others.
ET reports that Alibaba now holds 57% in Paytm Mall.