Besides reducing the burden of Chinese investment by Alibaba, Paytm will find the Japanese conglomerate investment to expand its soon to be launched payments bank operations, expand the user-base and unveil more financial products.
Commenting on the development, Paytm Founder and CEO Vijay Shekhar Sharma said they the company is at an inflexion point in its journey. “This investment by Softbank and support of the incredible entrepreneur Masayoshi Son is a great endorsement of our team’s execution and vision. We believe that we have a great opportunity to bring financial inclusion to half-a-billion Indians.”
Paytm plans to invest about around Rs 10,000 crore over the next three to five years towards enabling half-a-billion Indians to join the mainstream economy. “As a part of this vision, the company will soon launch the Paytm Payments Bank,” it added.
Paytm, which has around 230 million wallet-users, plans to launch its payments bank on May 23, and will use the money to acquire new 500 million customers and launch a slew of financial service products such as wealth management, deposits, and money lending, among others.
Paytm has tied up with several financial institutions including banks such as ICICI Bank and Bank of Baroda and startups such as Capital First and Capital Float to lend to customers on their behalf.
SoftBank Group Chairman and CEO Masayoshi Son said that the company’s investment in Paytm is line with the Indian government's vision to promote digital inclusion. “We are committed to transforming the lives of hundreds of millions of Indian consumers and merchants by providing them digital access to a broad array of financial services, including mobile payments,” said Son.
SoftBank, which was an early investor in Alibaba, has committed investments of over $10 billion in India. It has pumped close to $2 billion into Indian startups like Snapdeal, Ola and Housing.com in last few years. The company had to write off a significant portion of that after the devaluation of those investments.