Ratan Tata backs Paytm parent One97 Communications

13 Mar, 2015

Ratan Tata, former chief of Tata Group and currently chairman emeritus of group's holding company Tata Sons, has invested an undisclosed amount in Noida-headquartered mobile internet firm One97 Communications Ltd, which runs m-com and virtual wallet property Paytm, the company said in a release.

As part of the investment, Tata will join the company as an advisor.

"There is no better advisor for Paytm," said Vijay Shekhar Sharma, co-founder and CEO, One97.

This is Tata's fifth investment in the digital space. Last month, the business honcho had invested in auto classifieds portal His other investments include online furniture store Urban Ladder; e-commerce major; and online jewellery retailer

Last month, Ant Financial Services Group, China's leading online financial services company that owns AliPay, had said it is acquiring 25 per cent stake in One97. The financials of the deal are not disclosed.

The company had previously raised funding from SAIF Partners, Intel Capital and Silicon Valley Bank, having raised around $30 million spread over three-four rounds.

It first raised Rs 26 crore (around $6 million then) in March 2007 from SAIF and SVB. It got Rs 10 crore ($2.5 million) more from the same investors at the end of the same year through convertible securities. A year later, it scooped just under Rs 50 crore ($10 million) from Intel Capital and SVB.

One97 had also filed to go public, where it sought to raise Rs 120 crore. It had received a go-ahead from the market regulator SEBI and had originally planned to list by December 2010. But it had decided to shelve the proposed domestic IPO plan and decided to rope in a new private investor.

At that time it raised $10 million in its third round of funding from SAP Ventures in 2011, the corporate venture capital arm of German software giant SAP. The company's valuation during this round was nearly $300 million.

It also counted small shareholders like IDFC, Reliance Capital besides individual investors such as Nikhil Vora.

SAIF Partners had bought out the stake held by Intel Capital and IDFC for an undisclosed amount thereby increasing its holding to around 50 per cent.

Founded in 2000, One97 Communications is a leading mobile-internet company in India that offers digital goods & services to its mobile consumers under the Paytm brand. It also provides mobile advertising, marketing and payments for merchants. In addition, it has a partnership with existing lead investor SAIF Partners where it invests in early stage mobile internet startups through One97 Mobility Fund.

Paytm claims to have about 25 million active wallets, and aims to build 100 million wallets by 2015-end. The company further claims that the average wallet balance is Rs 150 and it is doing a million transactions a day across Paytm app as well as other merchants like Uber, BookMyShow, etc.

"We are now doing $1 billion gross transaction value from the mobile app. This year, our target is to grow $4 billion gross transaction value," added Sharma.

(Edited by Joby Puthuparampil Johnson)