Japanese Internet giant SoftBank, who recently acquired a 21% stake in Paytm Mall in April this year, is now looking at a heavier bet on the company with the possibility of as much as $3 billion further investment, according to India’s Economic Times citing two people familiar with the matter.
One key consideration is the weighing of benefits and tax implications as SoftBank have to let go of its stakes in Flipkart to Walmart given Flipkart’s restrictive clause against further investments to Paytm Mall until 2020, the same ET report says.
In addition to SoftBank, Paytm Mall, an online marketplace unicorn spun from One97 Communications, also has strong backers like China ecommerce giant Alibaba (46%) and venture capitalist, SAIF Partners (20%).
With the US retail powerhouse – Walmart buying up 77% stake in Flipkart for approximately $16 billion, SoftBank’s Flipkart exit to invest additional funds into Paytm Mall may replicate the same model that the Japanese firm has established in China, where SoftBank-backed Alibaba competes with Tencent and Walmart-backed JD.com.
Source: Economic Times