Paytm likely to close Rs 2,000-cr funding deal in the next few weeks

Paytm, the Alibaba-backed firm, is all set to raise about $300 million (over Rs 2,000 crore) in a round of fresh funding from a clutch of investors, including Taiwanese semiconductor maker MediaTek and Goldman Sachs.

According to sources, Paytm will announce the deal in the next few weeks. The financing round is also expected to see participation of existing investors, Alibaba and its payments affiliate Alipay as well as venture capital firm SAIF Partners, they added.

This will take Paytm's valuation to about $5 billion. The funds will be deployed across Paytm's businesses, including digital payments, online marketplace with a special focus on the upcoming payments bank, sources said.

Paytm has raised close to $700 million from Alibaba and Alipay. The company did not respond to an e-mailed query.

The new funding to Paytm would be the largest financing round in the country's technology and Internet space this year, well ahead of $200 million raised by online marketplace Snapdeal.

While a number of multi-million dollar fundings were announced last year by the likes of Flipkart, Snapdeal and Ola, the last few months have been tough for these startups as investors have tightened their purse strings.

The sources said a major chunk of the funding could go towards the payments bank operations.

Also read : Paytm raises $500 million in a new tranche, Alibaba becomes official investor

Paytm founder Vijay Shekhar Sharma has said the payments bank will become operational later this year. A month back the firm was hiving off its marketplace into a separate entity. The company had confirmed the news to YourStory.

This move is being done in order to ring-fence the marketplace business from the regulated business of financial services, said Sudhanshu Gupta, Vice President of Paytm

Paytm is also expected to launch its payments bank by August-September, according to Sharma. Few months back it had also tied up with financial institutions to provide collateral-free working capital loans for small merchants and kirana store owners on its platform.