Paytm in talks to raise $500 million to build new retail

Tinuku - Digital payments firm Paytm owned by One97 Communications Ltd is in talks to raise about US$500 million from new and existing investors to build a new business vertical. New Retail which is likely to be launched by August-end will be led by Renu Satti who recently stepped down as the chief executive of Paytm Payments Bank.

New retail will attempt to create a business along the lines of China’s Koubei and Meituan. Koubei describes itself as a life search engine providing living consumption information on restaurants, travelling, house renting and buying, while Meituan which also invests in food delivery start-ups is a buying website for locally-found consumer products and retail services.

Tinuku Paytm in talks to raise $500 million to build new retail

“There is a gap and opportunity in the daily needs and the hyper-local space. These categories drive for us a million orders a day and we wanted to further expand,” said Vijay Shekhar Sharma, Paytm’s founder and chief executive Paytm.

New retail will also help customers discover neighbourhood pharmacies and grocery stores, besides facilitating online orders and instant deliveries. Paytm confirmed it was working on the new initiative and is on the hunt for a new CEO for its payments bank operations. The new model will help shopkeepers with technology, logistics and marketing capabilities.

Paytm is also building a peer-to-peer logistics platform with a pan-India rider network, which will be utilized for intra-city deliveries. It has already partnered with a large network of local shops, restaurants, pharmacies and grocery stores for accepting payments. The company has eight million offline merchants on its platform.

“We will work with local restaurants, grocery stores and pharmacies to enable them for local ordering and delivery. Renu will lead the New Retail initiative and she has resigned from the bank CEO position. Local ordering is expected to become one-third of Paytm orders and gross merchandise value by 2020,” added Sharma.

One97 Communications has raised over US$2 billion since its inception and is currently valued at over US$10 billion. One97 claims to have touched US$4 billion in monthly gross transaction value with the number of transactions touching a peak of 1.3 billion in the quarter ended June.