Ant Financial, the affiliate group of Alibaba that oversees its third-party payment service Alipay, has invested in India’s One97, the parent company of third-party payment service Paytm, Bloomberg reports. The size of the investment has not been disclosed, but Ant Financial will take a 25 percent stake in the New Delhi-based firm.
Rumors of the investment had been circulating for weeks, with the Wall Street Journal and others reporting the round was worth US$575 million.
Paytm is a payment processor built specifically for India’s mobile shoppers. The Reserve Bank of India places tough restrictions on companies looking to receive a PPI license (prepaid payment instrument) license, so Paytm’s permission, coupled with its two-tap checkout procedure, have helped it gain strong traction domestically. When Tech in Asia profiled the company in October 2014, founder Vijay Shekhar Sharma claimed that Paytm was processing 600,000 orders every day, and 5 million orders on mobile every month.
Alibaba has spent the past two years investing aggressively in startups and new technology. Most of these investments have been directed towards China, but the company has sunk money in several US-based firms as well.
Ant Financial says that this marks its first investment in an Indian company. But Alibaba looks set to make more bets in India in the future. Last November, at an event held by FICCI, Ma said that the company is growing its team in India, and that he hopes to engage Indian suppliers on Alibaba more deeply in the future. On the non-ecommerce front, Alibaba acquired China’s UCWeb, which makes a mobile browser that’s popular both domestically and in India too.