More money in Paytm’s wallet: Alibaba makes second investment in Indian epayment startup

Alibaba and its affiliate Ant Financial, which oversees online payment service Alipay, today announced a second strategic investment in Indian epayment and commerce startup Paytm.

In February, Ant Financial invested in Paytm for a 25 percent stake.

Although today’s deal size is not disclosed by either Alibaba or Paytm parent company One97, India’s Economic Times cites insiders saying that the new investment is worth US$680 million and takes Alibaba’s stake in Paytm up to 40 percent.

The Indian startup will use the fresh funding for scaling up its operations, marketing, and upgrading technology.

100 million users

Paytm is a payment processor built specifically for India’s mobile shoppers. With its two-tap checkout procedure, it has grown to 100 million active users of the online wallet feature. Users carry out 75 million transactions every month.

“With the Alibaba and Ant Financial [investment], we look to help millions of small businesses leverage the mcommerce opportunity,” says Vijay Shekhar Sharma, founder and chief executive officer of Paytm.

Paytm also has an ecommerce site and app. Alibaba has spent the past two years investing aggressively in China and US-based startups. Now it’s turning to India. Investing in Paytm will help Alibaba tap opportunities in India’s mobile commerce industry.

“India is an important emerging market with strong ecommerce potential. This investment will further expand Alibaba Group’s global footprint to India’s mobile commerce market,” says Alibaba CEO Daniel Zhang in today’s statement.

The funding from Alibaba could help Paytm get strong backing to take on India’s leading ecommerce player Flipkart, Amazon’s India site, and the fast-expanding Snapdeal.