While 2016 banknote demonetization affected billions of people and caused grave trouble to some, Indian government’s aggressive strategy to curb corruption and encourage digitalization overall received a thumps up from the citizens. One of the biggest gainers of that demonetization was a start-up called Paytm, who via persistent advertising were already gaining popularity as a cashless app or mobile wallet in the Indian market.
Paytm Now India’s Second Most Valuable Startup
Paytm’s stocks skyrocketed after demonetization and now, Japanese Internet and Telecom giants SoftBank have acknowledged Paytm as India’s premier option against cash. Softbank has pledged an investment of US$1.4 bn to gain 20% stake in the company, which now pushes the valuation of Paytm past US$7.0 bn, making it the second most valuable startup in the country, only behind Flipkart.
Paytm is owned by One97 Communications, which has 45% stakes belonging to China’s Alibaba and its online payment affiliate Alipay. They are now chalk and cheese ahead of other e-wallet portals in India including Citrus Pay, ICICI Pockets, LIME, and PayUMoney.
SoftBank’s Strategic Investment in India’s Digital Commerce
While this development is a major boon for Paytm, it also is a clear indication of SoftBank’s keen interest in India’s ecommerce. In the recent past, Masayoshi Son-led Company has put his weight behind Snapdeal, rides the country with Ola App, and offers home delivery services such as Grofers and Oyo. In total, SoftBank has poured in US$3.5 bn in the Indian market, and are in talks to sell Snapdeal to India’s biggest online retailer Flipkart. If that deal goes through, SoftBank will have stakes in both of India’s largest internet companies – Paytm and Flipkart.