Japan based SoftBank may invest huge money in Paytm Mall

Japan based SoftBank might make huge investment in Vijay Shekhar Sharma's Paytm Mall. This news came amidst reports that SoftBank is mulling over step out from Flipkart, after the much-awaited Walmart's acquisition. According to a report in Economic Times, SoftBank has held early discussions to invest more in Paytm Mall. 

Citing sources, the report said that SoftBank could be freed from a clause in its agreement with Flipkart that restricts it from investing more than $500 million in Paytm Mall until 2020. SoftBank, which in April announced a $400 million investment in Paytm Mall for a 21% stake, has since held talks to invest as much as $3 billion in the company, the second source told the publication. 

Meanwhile, after going through funding winter in 2016 and a volatile investment environment in 2017, the Walmart-Flipkart deal has brought warmth to the domestic startup universe.

Arjun Zacharia, CEO at start-up online store Wooplr, is seeing the $16-million deal between the two retail giants as “one of the tipping points in Indian startup ecosystem”.

“I consider this as one of the tipping points in Indian startup ecosystem.  As an (startup) entrepreneur I think this (Walmart-Flipkart deal) solves a lot of the problem at macro level because whenever we travel outside India we get asked ‘hey how are things happening there (India)’? Are there going to be exits? Are there going to be larger businesses made? Now, with this acquisition, a lot of those questions get answered. A lot of these companies will start looking at India,” said a buoyant Zacharia.

Vivek Mansingh, general partner, YourNest Capital Advisors Private Limited, is equally elated with a home-grown ecommerce company reaching a valuation of over $20 billion in around 10 years.

This, he said, will instil confidence in investors and venture capitalists to infuse more funds into domestic startups.  

“In my view, there are seven positive perspectives that emerge from the deal. It shows that Indian businesses can create $20+ billion value in a relatively short period of time of about 10 years. An Indian startup can take on global giants like Amazon. First generation entrepreneurs can make it happen. Indian startups can attract global money (Tiger Global, Softbank, Microsoft, etc). If one can build a business that can scale, there is interest from global players for M&A and healthy exits can happen. Employees, who work at start-ups, can have amazing success (No need to go outside India or to MNCs only). With such a big infusion of money will create a lot of jobs over the years,” said the former Cisco and Dell executive, who has mentored many startups to success over the years.