Mumbai: In order to push it Online-to-Offline (O2O) retail business and to get customers to use its platform to make payments, One97 Communications, the parent company of Paytm is going to raise $300-500 million.
As per the information available, Renu Satti will step down to take on the COO’s mantle at New Retail – which is the new vertical. Earlier, she was heading the Paytm’s Payments Bank.
According to the sources, the Paytm is currently tapping its existing shareholder – SoftBank as well as other US-based investors to raise the latest funding. This funding will value the digital payment company at about $10 billion.
The sources aware of the development also revealed that the latest funding will be used to enhance the hyperlocal O2O business. With this, the company plans to increase the footfalls for offline stores by offering deals and discounts through Paytm app.
The buyers will be paying through the QR codes available in the offline stores and this will result in increase in transaction numbers for the digital payments firm. As of now, there will be no commission charged from the merchants rather they have to pay a nominal fee for logistics and marketing costs.
One of the leading digital payments players, Paytm, has also entered into hotel bookings, movie and event ticket bookings to increase its transactions. Vijay Shekhar Sharma, CEO & founder of Paytm, said, “The motive of Paytm is to enable same-city commerce and enable restaurants, grocery stores and pharmacies to increase their footfalls through various offers and deals. Tie up with 4,500-5,000 merchants has already been done.”
New Vertical Different from Paytm Mall
The O2O commerce model is already been used by Paytm Mall but it will still remain a separate entity and will continue to target other sorts of use case. The new vertical of Paytm, New Retail as it is named, will sell items of immediate requirements like food, groceries and medicines too whereas the model of Paytm Mall is to tie up with various brand stores for facilitating deliveries.
The digital payments service provider wishes to focus on in-store commerce through its new vertical and this is why it has been modelled on Meituan-Dianping, a group-buying website for local consumer products and retail services of China. It would also not have any warehouses like Paytm Mall or any other supply chain works for horizontal marketplace. It has been claimed by the Paytm that currently, it is running on 5 billion transactions and $50-billion gross transaction value.