At $5 billion, Paytm is close to Flipkart in value Alibaba buys back less than 1% stake held by Reliance Cap in the e-commerce company for $41 million
China’s top e-commerce player and lead investor in Paytm, Alibaba, has bought a marginal stake held by Reliance Capital for $41 million. While the deal has meant a 27-fold return for the Anil Ambani-led firm, it has lifted the valuation of One97 Communications, the parent company of Paytm, to an estimated $5 billion at a time when the e-commerce universe is facing severe markdowns.
Reliance Capital had acquired less than one per cent stake in One97 Communications for $1.51 million in 2009.
With this, the Paytm group has risen to the second position in the ecommerce valuation pecking order, if only companies with Indian founders are counted. Flipkart, whose valuation had risen to more than $15 billion a year ago, has gone through several markdowns. The latest markdown by Morgan Stanley pegged Flipkart’s valuation at $5.39 billion. Another prominent online player — Snapdeal — was till a year ago valued at around $6.5 billion, but the company is learnt to be in talks to raise capital at a valuation lower than $4 billion.
Both Paytm and Reliance Capital did not divulge any details of the deal. But sources said everything was finalised late Monday evening.
Reliance Capital has still retained a stake in Paytm e-Commerce, which it had got free of cost by virtue of its investment in the parent firm, sources said. One97 Communication as well as its two subsidiaries — Paytm Payments Bank and Paytm Marketplace — had turned unicorn (valuation of $1 billion or more) recently. The group’s valuation last year was estimated at around $3 billion. Read more