Paytm initiates funding talks with Microsoft


Paytm initiates funding talks with Microsoft

The multi-source and multi destination payment solutions facilitating firm,Paytmis in talks with the US based multinational technology big wheel, Microsoft in regards to a fresh funding. This initiative is taken to boost the company’s war chest to measure up the growing competition in the sector.

The proposed fund raise, which may amount to around $100 million (Rs 760 crore), is likely to be an extension of a planned $1-billion (Rs 7,600 crore) fundraising that the company had initiated last year, people briefed on the matter told ET.

In November 2019, US-based asset manager T.Rowe Price had come in as a new investor, ploughing $150 million (Rs 1,140 crore) into Paytm, valuing the company at $16 billion. The entire sum from this round is yet to come in, as per regulatory filings by the Noida-based firm.

“The talks with Microsoft began last year when Paytm was in the middle of raising funds. While Microsoft could not participate in the funding then, it is likely to pump in cash now,” said a person familiar with the talks.

A Paytm spokesperson declined to comment on ET’s query seeking comments while a Microsoft spokesperson said: "At this moment, we do not have any comments on your proposed story."

In November, Paytm said it had raised $1 billion in a financing round led by T.Rowe Price, with existing investors Ant Financial and SoftBank Vision Fund also participating. However, only about $720 million (Rs 5,472 crore) of that capital has so far come through, as per regulatory filings. Alibaba's affiliate Ant Financial, the largest investor in Paytm, will now need the Indian government's approval for the proposed investment, according to the new foreign direct investment guidelines issued by India recently.

Microsoft had earlier taken a wager on Flipkart in 2017 and has held discussions with ride-hailing app Ola for a potential fundraise. The firm also partnered with Reliance Jio for its cloud business, Azure, in August last year.

The Redmond, Washington-based Microsoft has been striking partnerships with Indian startups and technology companies as it doubles down on its cloud service and seeks to corner market share against arch rival and the largest player in this segment—Amazon Web Services. Currently,Paytm uses AWS cloud services.

The Vijay Shekhar Sharma-founded company would gain in a big way by bringing Microsoft onto its investor list as it gets access to the firm’s connectivity, computing, and storage solutions. This also comes at a time when Paytm has already been fighting a bruising online payments war with the likes of Google Pay.