Jack Ma’s firms, Alibaba and Ant Financial, back off from Paytm and have sold their 43.3% stake to the company for just $5.5 million (around Rs. 42 crores). In the last round of funding in 2020, the company was valued at $3 billion.
From the combined 43.3% stake, Alibaba had 28.35%, and Ant Financials owned a 14.98% stake. Now Paytm eCommerce Pvt. Ltd has bought the entire stake from both companies.
Chinese billionaire Jack Ma was one of the oldest investors in Paytm, owned by Vijay Shekhar Sharma, putting in $200 million at a $ 1 billion valuation in its first fundraising in 2017. In total, Paytm Mall raised $800 million from various investors, from which Alibaba and Ant Financial were two significant names, along with SoftBank, Elevation Capital (SAIF partners), and eBay.
“Against this backdrop, the specified shareholders, Alibaba and Ant Financial, have expressed their desire to exit their investment in the company to build the path of revival and growth on a new trajectory,” Paytm Mall said.
The Paytm Mall spokesperson has denied that this act has changed the company’s valuation. Since the company has cash reserves higher than the valuation quoted, the company’s valuation cannot be seen as under $13 million.
“The exit price of any company is not reflective of the valuation of the company, and neither does the exit have any link to any FDI laws. One simple metric is to consider that our cash balance itself is significantly higher than the quote number in media reports, which establishes that the suggested low Fair Market Valuation is completely inaccurate”, said Paytm Mall.
An extraordinary general meeting will be held on May 23. Let’s wait for more information!