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New Delhi, Paytm is on track to break even in 12-18 months with increased financial discipline and targeted strategic investments, investment research firm Bernstein said in a pre-IPO primer.

According to reports, Paytm is aiming to raise about $3 billion in an initial public offering (IPO) late this year, which could be the country’s largest debut ever.

The startup, backed by investors including Berkshire Hathway, Softbank and Ant Group, plans to list in India in November around Diwali.

Paytm, formally called One 97 Communications, is targeting a valuation of around $25 billion to $30 billion, as per reports.

“Paytm has come a long way from a simple digital wallet business to an integrated payments ecosystem. We believe the next stage of growth will be led by financial services, particularly delivering seamless credit tech products to consumers and merchants.

“With increased financial discipline (rare in the hyper-competitive payments space), Paytm is on track to break even in 12-18 months. We expect Paytm to continue being the largest payments and fintech ecosystem in India,” Bernstein said in its report.

Paytm has realigned its payments strategy around merchant payments leadership. Paytm’s beneficiary UPI market share (a proxy for merchant receipts) is rising month-on-month and was 16 per cent in April, the report said.

“Combine that with its digital wallet, merchant acquiring and online merchant payments, Paytm has a total throughput of $52 billion in FY21, up 33 per cent year on year,” it added.

Paytm’s credit tech vertical is likely to lead the next wave of revenue growth.

“We expect Paytm’s revenue base to double by FY23 to $1 billion with non-payments revenue contributing 33 per cent,” Bernstein said.

Paytm has crossed the proof of concept stage on consumer credit tech and merchant credit tech. Early disbursal numbers have been strong, rising month-on-month with strong bank and NBFC funding partners. Broking business with Paytm Money has also got off to a strong start, the report said.



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Zeta raises $250 million in a Series-D funding led by SoftBank

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Fintech start-up Zeta, a company co-founded by billionaire and serial entrepreneur Bhavin Turakhia, has raised $250 million from SoftBank, while existing investor Sodexo also participated in this round as a minority investor.

The fund raise values Zeta at $1.45 billion, making it the latest to join the coveted unicorn status.

The fund was raised from SoftBank Vision Fund 2, and this is the largest single raise by a banking tech startup globally, said Bhavin Turakhia, Co-founder and CEO, Zeta told media over Zoom call.

In 2019, Fintech start-up Zeta raised a Series C investment of under $60 million from Sodexo at a valuation of $300 million. With this investment, Sodexo will have a minority stake of under 20 per cent in Zeta.

Also Read: Zeta secures Series C investment of nearly $60 million from Sodexo at $300 million valuation

Including Zeta, 14 startups have become a unicorn this year in the country.

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SoftBank’s internet business to invest $4.7 bn in tech over five years

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SoftBank’s internet arm Z Holdings is targeting sales of 2 trillion yen and operating income of 225 billion yen by 2023

SoftBank’s internet subsidiary Z Holdings on Monday outlined plans to invest 500 billion yen ($4.7 billion) in technology over five years with a focus on artificial intelligence.

The announcement follows the completion of the merger of its internet business Yahoo Japan with chat app operator Line creating a $30-billion internet heavyweight.

Also read: SoftBank-backed robotics firm Berkshire Grey to go public via $2.7 billion SPAC deal

Z Holdings is targeting sales of 2 trillion yen and operating income of 225 billion yen by 2023, the firm said in a statement.

Published on


March 01, 2021

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Report, BFSI News, ET BFSI

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SoftBank‘s Vision Fund is preparing to raise between $500 million and $600 million via an initial public offering of its first special purpose acquisition company (SPAC), U.S. news portal Axios reported on Sunday, citing multiple sources.

SoftBank is said to be preparing for at least two additional SPACs, the report added. A SoftBank spokesman declined to comment.

Reuters reported in October that the Vision Fund was targeting external funding for a blank-cheque company.

Such a move would see Masayoshi Son‘s SoftBank joining the rush for SPACs, shell vehicles that raise money in an initial public offering (IPO) before merging with a privately held company. The vehicles are being using to take a record number of companies public, bypassing the traditional IPO route.

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