US-based e-commerce giant EBay has renewed efforts to tap into the Indian market, announcing this week that it has picked up a 5.5 per cent stake in Paytm Mall, the e-commerce platform of payments firm Paytm. While neither company disclosed the financial details of the deal, reports say that EBay could have shelled out as much as $150-200 million for the stake. Such an investment would take Paytm Mall’s valuation close to $3 billion from under $2 billion last year.
Paytm Mall had raised around $650 million in several rounds before EBay’s offer.
The agreement will see EBay strengthen its foothold in the fast growing Indian market and allow it to utilise Paytm’s platform to reach Indian consumers. According to the two firms, over a million of EBay’s products will become available on Paytm Mall after the deal’s closure. “We will jointly select the inventory we want to bring here. It will be done in a month’s time,” said Vijay Shekhar Sharma, founder & CEO, Paytm.
“This new relationship will accelerate our cross-border trade efforts in a rapidly growing market, providing hundreds of millions of Paytm and Paytm Mall customers with access to eBay’s unparalleled selection of goods,” added Jooman Park, eBay Senior Vice President, APAC. “This reinforces our commitment to invest in India and complements our existing import, export and domestic platforms,” he said.
While EBay stands to gain from receiving access to Paytm’s reach, the deal will also help Paytm Mall compete on a stronger footing against Amazon and Walmart-owned Flipkart, say analysts. Paytm Mall is backed by investors like SoftBank, Alibaba, Ant Financial and SAIF Partners and reported a Gross Merchandise Value (GMV) of $188 million in 2018.