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Paytm raises $1 Bn in financing round from SoftBank, Ant, others

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New Delhi: India’s digital payments pioneer Paytm announced new funding from existing shareholders like SoftBank Group Corp.’s Vision Fund and new investors, as competition in the country’s finance sector heats up.

The company has raised $1 billion in a funding round led by the US-based asset manager T Rowe Price. The others include existing investors Softbank and Ant Financials, which have invested $200 million and $400 million, respectively. Existing investor Discovery Capital and D1 Capital also participated in this round.

Company-founder Vijay Shekhar Sharma confirmed the investments. The funding round valued Paytm at $16 billion, making it the second most valued Indian startup after Flipkart. In 2018, Flipkart was valued at $21 billion when Walmart acquired a majority stake in the company.

The company will expand into insurance, lending and investments and invest 100 billion rupees ($1.39 billion) over the next three years to include more users in the country, Paytm said.

Paytm’s investment comes almost a year after it had raised money from Warren Buffett’s Berkshire Hathaway in September last year. The funding round had valued the company at $10 billion.In the previous round, Paytm had raised $300 million from Warren Buffett’s Berkshire Hathaway in 2018. The company was valued at $10 billion then. In the year since, the company has cashed out employee stock options. This is the first primary funding round since Berkshire Hathaway’s investment.

As for competition, Sharma was confident that they are miles ahead of Paytm’s rivals GooglePay, Amazon Pay and PhonePe. He added that these platforms have been spending billions of dollars in the last two-three years but couldn’t even “touch” their payments business. “We have been successful in not just protecting but increasing our market leadership,” he stated

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Zomato acquires UberEats India for nearly Rs 2,500 crore

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New Delhi: Zomato on Tuesday announced that it has acquired Uber’s Food Delivery Business in India in an all-stock deal and Uber will have 9.99 per cent stake in the Deepinder Goyal-led food delivery platform.

According to sources close to the deal, it is in the range of over $350 million or nearly Rs 2,500 crore.

Uber Eats in India will discontinue operations and direct restaurants, delivery partners, and users of the Uber Eats apps to the Zomato platform, effective from Tuesday.

“We are proud to have pioneered restaurant discovery and to have created a leading food delivery business across more than 500 cities in India. This acquisition significantly strengthens our position in the category,” said Goyal, Founder and CEO, Zomato.

According to company sources, for the first three quarters of 2019, “our Uber Eats business comprised 3 per cent of our global Eats gross bookings, but was more than 25 per cent of our global Eats Segment Adjusted EBITDA losses”.

Uber started its food delivery service in India around mid-2017, but has not been able to scale up in the face of big players like Zomato and Swiggy.

It currently has nearly 26,000 restuarants listed on its platform from over 40 cities.

The market is piping hot as according to a recent study by business consultancy firm Market Research Future, the online food ordering market in India is likely to grow at over 16 per cent annually to touch $17.02 billion by 2023.

Uber CEO Dara Khosrowshahi said that the Uber Eats team in India has achieved an incredible amount over the last two years.

“India remains an exceptionally important market to Uber and we will continue to invest in growing our local Rides business, which is already the clear category leader,” said Khosrowshahi.

“We have been very impressed by Zomato’s ability to grow rapidly in a capital-efficient manner and we wish them continued success,” he added.

On January 10, Zomato had announced that it has secured $150 million in fresh funding from Ant Financial, a subsidiary of China-based giant Alibaba.

The latest round of funding in Zomato, which currently value the company at $3 billion, is part of $600 million funding round announced by Zomato CEO Goyal at a Delhi event last December.

The deal comes in the wake of merger talks between Zomato and Swiggy, whoch both the companies have denied to date.

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