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January 15, 2021

UBS looks to buy $400m worth stake in Paytm

Swiss investment bank UBS is reportedly in talks to invest as much as $400m in Indian digital payments giant Paytm.

The move is in light of the growing digital payments market in the country, Bloomberg reported citing people familiar with the matter.

The investment will come from a fund managed by UBS’s asset management arm.

UBS is in talks to acquire a stake in Paytm in collaboration with some of its clients, the report added.

The investment bank is negotiating the stock purchase of Paytm from a group of employees of the fintech company.

UBS intends to finalise a deal in this month however, talks may be delayed or fall apart, according to Bloomberg.

As part of the deal, Paytm is not raising any new capital.

Paytm, which is valued at $16bn, is backed by Chinese tech tycoon Jack Ma’s Ant Group, and Softbank.

It competes with other payment behemoths in the country, such as Google Pay, Walmart’s PhonePe, Facebook’s WhatsApp payments service, and other small startups.

Last month, Ant Group refuted plans of divesting its stake in Paytm.

In the same month, Indian digital payments company Pine Labs raised nearly $100m, bringing the company’s valuation from $1.6bn to over $2bn within one year.

Meanwhile, Walmart-owned Flipkart’s board decided to partially spin-off PhonePe to help the latter gain access to capital to fund its growth over the coming three to four years.

PhonePe planned to raise $700m in primary capital, at $5.5bn post-money valuation.

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