Paytm's e-commerce unit Paytm Mall has raised $200 million through funding by Chinese giant Alibaba making it the latest Indian unicorn.
Paytm's e-commerce arm Paytm Mall has raised $200 million through funding led by Chinese e-commerce giant Alibaba making it the latest Indian unicorn, reported Business Standard. Unicorn is the term for an unlisted company valued at over a billion dollars and Paytm Mall has placed itself in this list with a $177 million from Alibaba's Singapore unit and $23 million from venture firm SAIF Partners.
This move has set the path for the Chinese giant's formal entry into India's fastest growing e-commerce market and also upped the competition with America's Amazon and domestic leader Flipkart.
Paytm Mall was recently demerged from its parent online wallet and digital payments One97 Communications, which owns the Paytm brand.
According to The Economic Times, Alibaba and its payments affiliate Ant Financial has a joint share holding of 40% in the e-commerce unit. Post the new investment, the shareholding has increased to 62%.
Business Standard reported that Paytm Mall plans to add close to a billiob more products from across overseas before the festive season this year including sellers from Southeast Asia, especially one of Alibaba's investment arm Lazada from Indonesia.
This would effectively lead to it selling twice the number of products compared to Amazon India and nearly 20 times compared to Flipkart and Snapdeal.
"This (the Alibaba shareholding) will come down as the company creates a large employee stock option pool (Esop) to attract and retain talent," said a source to ET. "We want to build this (Paytm marketplace) into the market leader of ecommerce in India, and Esop will be for both new and existing employees," said the source.
Over time, employees will own more than 10% of the total shareholding of the e-commerce platform.
Alibaba also owns less than 5% stake in Delhi-based Snapdeal, which founded itself slipping to the third position in the Indian online retail market.
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