Paytm could be valued at $5 billion after fresh funding

Digital payments and commerce platform Paytm is close to raising $300 million in a round that is likely to be led by Taiwan's Mediatek said a report in the Time of India (TOI). The funding is expected to value the company at $5 billion (post-money).

People aware of the development told TOI that Paytm is also in talks with Chinese international conglomerate and investment company Fosun, Taiwanese electronics manufacturing company Foxconn, Singapore's sovereign wealth funds GIC and Temasek for participation in this round.

Paytm's existing investors Alibaba Group and SAIF Partners will also participate in the round. In the last fund-raise, the company was valued at about $2.8 billion. The fresh cash will be used for the company's three verticals — the payments business, the planned payments bank and the e-commerce business.

Sources also told TOI that Goldman Sachs has also held talks with Paytm but the Noida-based company is not comfortable with the terms being put by the investment bank.

"Mediatek is in the final stages of talks to lead the round. Other Southeast Asian investors are still in discussion to top up the round and it might take some time," a person directly aware of the talks told TOI.

Paytm recently separated its commerce business from the payments business. How much of the fresh funds will be allocated to which business has not been finalized yet. But a significant chunk is expected to go towards the payments bank launch and its core business — online payments.

The fresh cash would also give Paytm muscle to build its commerce business to fight rivals like Amazon and Flipkart. Alibaba Group has invested $700 million in Paytm so far and holds a 40% stake in the company. The Chinese e-commerce major is planning to start an e-tailing business in India early next year, and is said to be considering using Paytm's commerce entity as the launch vehicle.

• Paytm
• valuation
• fresh
• funding