"We are committed to transforming the lives of hundreds of millions of Indian consumers and merchants by providing them digital access to a broad array of financial services, including mobile payments", said Masayoshi Son, SoftBank's chairman and CEO in a statement.
Sharma informed that with this one-time investment of $1.4 billion, SoftBank will hold a 20 percent direct stake in Paytm, along with a 12 percent indirect holding through its majority stake in Alibaba, the Chinese internet giant that has 40% stake in One97, Paytm's parent company.
Paytm stated that the funding will complement its investment plan of around $1.6bn in the next three to five years.
SoftBank's investment values Paytm at about $7bn as reported by several Indian media publications.
SoftBank, an early investor in Alibaba, has committed investments of over $10 billion in India.
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"SoftBank backing us shows their belief in Paytm and our plans of becoming a full-fledged financial services company".
SoftBank's wager on Paytm comes at a time when it is consolidating its India bets and putting its weight behind category leaders in the cash-guzzling consumer internet sector.
Paytm's zero cost QR Code-based payment solution has been adopted by millions of merchants and has become synonymous to digital payments in India.
Paytm on Wednesday said it will finally launch the operations of its payments bank on May 23. SoftBank and Paytm declined to give details. Prior to this round, the payments firm, which started life as mobile value added service delivery platform in 2000, raised $60 million from Taiwan's Mediatek at a $4.8 billion valuation in August previous year. That increased to $6bn in March 2016 when Alibaba Group and Ant Financial Services Group bought a combined stake of almost 4.3% from three Paytm investors Reliance Capital, SVB and SAP Ventures. He recently set up a new company, Paytm Financial Services for selling financial services products. While it has pumped in close to $2 billion into Indian startups in last few years, it has also written off a significant portion of that on account of loss in valuation.
The company said that it would introduce the Paytm Payments Bank, a mobile-first product that will reach every corner of the nation, and focus on the millions of unserved and under-served Indians. Acronym for "Pay Through Mobile", it was launched in August 2010 as an online recharges and bill payments platform and soon expanded into ubiquitous online and offline use-cases.
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