Softbank is on a roll and has been making massive investments in Indian consumer internet space. Paytm today announced an investment of US$1.4 billion by Japanese giant SoftBank in its parent company, One97 Communications.
Paytm, which also has backing from Chinese giant Alibaba, recently split into two: Paytm Ecommerce and Paytm Payments Bank. Alibaba made a fresh investment of US$200 million to take the lead in the ecommerce arm and prepare for a direct face-off with global rival Amazon and India’s Flipkart, which also raised US$1.4 billion last month in a round led by Alibaba’s Chinese rival, Tencent. Paytm recently obtained a licence to run a payments bank – a special entity created in India which is limited to enabling payments with a larger scope than a wallet, but restricted in giving out loans.
“This investment will help us grow our leadership in the country’s payment ecosystem, expand our user base, and build a suite of financial services products for our customers,” Paytm says in a blog post.
Softbank has also been finalizing the forced sale of of troubled Snapdeal to Flipkart after it succumbed to onslaught of Amazon and Flipkart. After the snapdeal fiasco, Ola founders ( Ola being another Softbank investment where the Japanese investment bank owns more than 40% of the company and founders mere little more than 10% ) have amended the Articles of Association of their company for minority shareholders ( including founders ) to be protected from majority shareholding investors.
Now Indian ecommerce battle is a three way war between Amazon, Flipkart and Paytm and massive local Indian market of 1.2 billion consumers is the winning trophy.