Alibaba-backed Paytm to invest $70m in AI startups

Indian digital payment giant Paytm said Monday it has set aside about US$70 million to invest in early-stage companies capable of building technologies that could work in sync with the country’s booming digital ecosystem.

Photo credit: Sharaf Maksumov / 123RF

Specifically, it is looking for AI-based companies that use big data to create solutions for problems that are India-specific, such as startups that support “India-first business solutions that are scalable and have the potential to generate large-scale employment,” Paytm said in a statement.

It said it typically invests around US$28 million to US$35 million every year in intellectual properties or companies that build complementary technologies.

Vikas Garg, deputy chief financial officer at Paytm, said that his company “partners with startups who have capabilities that augment the digital ecosystem for the next wave of growth. These investments are also an indication that Paytm believes India’s entrepreneur ecosystem is innovative and is growing well.”

In July 2017, Paytm acquired online event-ticketing platform Insider and, five months later, Nearbuy and Little, which focused on restaurant deals. Last year, it invested US$16 million in Gamepind Entertainment, a mobile gaming company that is now also available on Paytm’s app. In August this year, it put in US$2.2 million in Bengaluru-based food catering company Hungerbox.

Paytm said it has also invested in other companies such as Loginext, Ticket New, Nightstay, QRQL, and RecruiterGrid. All these investments are its efforts to be a one-stop shop for its users and be a super app.

Paytm already operates its own ecommerce marketplace Paytm Mall, has a wealth management platform through which it sells mutual funds and insurance, and sells travel and event tickets apart from many other utility bill payment services.

While Paytm’s losses for financial year 2018-2019 widened by almost 3x to US$590 million, its founder Vijay Shekhar Sharma said it’s looking at an initial public offering by 2021 once it starts earning cash.

This report was first published on KrAsia.