BENGALURU: PayTM, India’s most valued start-up, has raised $1 billion in a fresh funding round led by American investment firm T Rowe Price and joined by existing investors, including Japan’s Soft Bank Vision Fund and China’s Ant Financial. With the fresh funds, the valuation of PayTM has risen to USD 16 billion. T. Rowe Price and the existing investor, D1 Capital and Discovery have pumped in USD 400 milliont in the USD 1 billion round.
Amid fierce competition from digital payment start-ups such as Walmart-owned PhonePe and Google Pay, the Noida-based fintech firm witnessed a drastic decline in UPI transactions in the past several months, but gained from its digital wallet services for offline payments. The profits of PayTM have fallen by nearly 167 per cent in FY19 YoY to Rs 4,217 crore, as per its annual report, with the rivals acquiring a major chunk of the market share.
The digital payments major said that it would use the funds to broaden its consumer internet service and offer more financial services such as lending, insurance, investments and stock broking. PayTM also plans to bring more merchants from Tier 2 and Tier 3 cities on its platform.
PayTM CEO and founder Vijay Shekhar Sharma said that the company was planning to strengthen its rural presence by investing Rs 10,000 crore over the next three years to bring half a billion Indians, mainly from the rural belt, into the formal financial system of the country.
“At PayTM we are committed to bringing half a billion Indians to the mainstream economy by onboarding them in the formal financial ecosystem. This new investment by our current and new investors is a reaffirmation of our commitment to serve Indians with new-age financial services,” Sharma said in a statement.
PayTM, according to sources, is also planning to launch advertisement services on its platform apart from strengthening its content arm, PayTM Inbox, which offers games, news and video services.