Digital payments company Paytm has committed investment of Rs 10,000 crore (~$1.4 billion) during the next three years to serve ‘financially underserved and unserved’ people in India. "Today, we open the next chapter in Paytm's journey of India's financial inclusion. We commit to invest additional Rs 10,000 crore to serve financially unserved/underserved," its founder and CEO Vijay Shekhar Sharma tweeted on Monday as the company announced raising its latest funding round of $1 billion at $16 billion valuation, according to media reports, even as it faces intense competition from Walmart's PhonePe, Google Pay, and Amazon Pay in hyper-competitive India's digital payments on the back of rising smartphone penetration, cheaper data, and affordable handsets.
Paytm's valuation has jumped from $10 billion in August 2018 even as reportedly around 200 employees of its employees had sold their shares for $50 million. Paytm's latest infusion comes from its existing investors including Ant Financial, SoftBank, Discovery Capital. T. Rowe Price Associates among others was the new investor. Paytm's parent, One97 Communications saw net losses reportedly worth Rs 3,959 crore for FY19 up from Rs 1,490 crore for FY18 while the company's standalone revenue saw a marginal rise from Rs 3,229 crore in FY18 to Rs 3,319 crore in FY19. The company, announcing the fundraise in its blog said that it will expand its services in consumer internet including lending, insurance, investment, stockbroking in its next growth phase to the masses apart from "strengthening user engagement with content services under Paytm Inbox that offers games, news, videos and more." It claimed of having merchants in more than 2,000 cities in India.
Paytm, which had around 140 million monthly active user base till around August this year, has been 250 million such users on mobile by March 2020 for which it will be putting Rs 750 crore, PTI had reported. The company had grown its international operations in Japan as well in around one year since the launch of its QR-code based payment service PayPay in partnership with SoftBank and Yahoo Japan. It became the second most preferred cashless payment service after credit cards, SoftBank's Q2 FY19 earnings presentation noted. Ahead of multiple types of e-money services QR-code settlement, 31 per cent respondents, as per a survey of 2,044 people between October 4-7, 2019, preferred PayPay while 41 per cent opted for credit cards including Visa and JCB to pay cashless.