Jack Ma-led Alibaba and Ant Financial Exit Paytm Mall This brings Vijay Shekhar Sharma Led-Paytm Mall's valuation to under $13 million
Opinions expressed by Entrepreneur contributors are their own.
You're reading Entrepreneur India, an international franchise of Entrepreneur Media.
Jack Ma-led Alibaba and Ant Financial have sold their stake in Paytm Mall, which is the e-commerce business of One97 Communications, the parent company of Paytm. This has brought down the company's total valuation to under $13 million. The company was valued at $3 billion in its last round of funding in 2020.
While Alibaba owned 28.35 percent of the Paytm Mall-parent company, Ant Financial (Netherlands) Holding held 14.98 percent. According to a news report that quoted the company's filings, Paytm E-Commerce has bought back the entire stake from both entities.
In 2017, the company not only raised $200 million in its first funding from Alibaba, but the e-commerce business of One97 Communication also has a business model inspired by Alibaba's T-mall in China. The total funding raised by the company is over $800 million and the key investors besides Alibaba and Ant Financial are SoftBank, Elevation Capital and eBay.
"Despite investing significant amounts of capital in growing its business and expanding market share, the company suffered operational losses. Given that the online business space is evolving rapidly with the onset of unique business models, changing technologies and new regulations, it is expected that additional capital and efforts will be required to be committed," the company was quoted as saying.
It added that the sector continues to be highly competitive and is marketed by the presence of several large competitors. "Finally, the ongoing pandemic has thrown up unique challenges for different businesses, and the company has also had to deal with declining market economics and demanding circumstances that impose continuous pressure on financial metrics. Against this backdrop, the specified shareholders [Alibaba and Ant Financial] have expressed their desire to exit their investments in the company," it said.