Paytm to raise $300-500 million for local e-commerce
Paytm to raise $300-500 million for local e-commerce
Renu Satti, who was heading Paytm's Payments Bank, has stepped down from her current role and will take on the COO's mantle at New Retail, as the vertical is being called.
BENGALURU/MUMBAI: Paytm's parent One97 Communications is raising $300-500 million to push its online-to-offline (O2O) retail business and get customers to use its platform for making payments, people familiar with the matter said. Renu Satti, who was heading Paytm's Payments Bank, has stepped down from her current role and will take on the COO's mantle at New Retail, as the vertical is being called.
Paytm is currently in talks with US-based investors as well as its existing shareholder - SoftBank - for the latest funding, which is likely to value the digital payments firm at about $10 billion, the sources said. The new financing will be directed towards the hyper-local O2O business, which aims to shore up footfalls for offline stores by offering deals and discounts through Paytm's app. Shoppers will pay through QR codes in these stores, thereby increasing transaction numbers for the digital payments player. For now, merchants won't be charged a commission by Paytm. They will, however, have to pay a fee for logistics and marketing costs.
Paytm has diversified into movie & events ticketing and hotel bookings, among others, to grow transactions. Paytm founder & CEO Vijay Shekhar Sharma said, "Paytm wants to enable same-city commerce and help restaurants, grocery stores and pharmacies grow their walk-ins through offers and deals. We have already tied up with 4,500-5,000 merchants."
Paytm Mall, which has also deployed the O2O commerce model, will remain separate and target a different sort of use case. While Paytm's New Retail is retailing food, groceries and medicines, which are immediate needs, Paytm Mall's O2O model has centred around tie-ups with brand stores for facilitating deliveries.
New Retail won't have any warehouses unlike how the supply chain works for horizontal marketplaces like Paytm Mall. Modelled on China's Meituan-Dianping, a group-buying website for local consumer products and retail services, Paytm wants to focus on in-store commerce through New Retail. Paytm claims it's on a run-rate of 5 billion transactions and $50-billion gross transaction value.
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