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One97 Communications Limited (OCL), the parent of digital payments company Paytm, said it has raised $1 billion from a group of investors, including existing shareholders such as Ant Financial, Softbank Vision Fund, and new investors including funds and accounts advised by T Rowe Price Associates Inc, among others.

Discovery Capital, an existing shareholder, also participated in the round, the company said in a statement.

That makes Paytm the second most valued Indian startup after Flipkart. In 2018, Flipkart was valued at $21 billion when Walmart acquired a majority stake in the company.

Paytm’s investment comes just over a year after it raised money from Warren Buffett's Berkshire Hathaway in September 2018.

The funding round had valued Paytm at $10 billion. The total money raised by Paytm is about $3.5 billion after the recent funding round.

The money will be used to double down on increasing reach with merchants — both offline and online.

Vijay Shekhar Sharma, founder and CEO at Paytm, said the new investment by the current and new investors is a reaffirmation of the company’s commitment to serve Indians with new-age financial services. The company is now valued at $16 billion, according to people familiar with the matter. They did not want to be named.

OCL said Paytm pioneered low-cost digital payments’ acceptability in India using its QR-code technology in local shops and retailers in its first phase of growth and is serving merchants in more than 2,000 towns and cities spanning across 650 districts. Now, Paytm aims to bring low-cost mobile enabled financial services to rural India, it said.

The company’s losses increased 165 percent over last year. In 2018-19, Paytm’s parent company One97 posted Rs 3,959.6 crore in net losses compared to Rs 1,490 crore in 2017-18 .The revenue in the same period marginally rose from Rs 3,229 crore in 2017-18 to Rs 3,319 crore in 2018-19.

First Published:Nov 25, 2019 8:49 AM IST