Jio-Facebook Deal Effect: Paytm Might Raise $100M Million With Microsoft

Paytm is reportedly in talks with Microsoft for more funds as the former is planning to increase its subscriber's base, and give tough competition to other platforms. Paytm might raise $100 million (close to Rs. 760 crore) in the coming days. This development comes after Reliance Jio announced its partnership with Facebook, where the latter has invested Rs. 43, 574 crore to buy its minority stake.

"The talks with Microsoft began last year when Paytm was in the middle of raising funds. While Microsoft could not participate in the funding then, it is likely to pump in cash now," a source close to the development was quoted by Economic Times. However, there is no confirmation from the Paytm side. On the other hand, Microsoft spokesperson said, "At this moment, we do not have any comments on your proposed story."

It is worth mentioning that the digital payments firm Paytm has recently raised $1 billion via T. Rowe Price. However, the company has not received the whole amount due to regulatory issues. The report states that only $720 million (close to Rs. 5,472 crore) has been invested so far. It reveals that Alibaba has invested a huge amount of money in Paytm, and for further foreign direct investment, it needs government permission.

This is not the first time that T. Rowe Price has invested in Paytm. Previously, the company invested $ 150 million (close to Rs. 1,140 crore) in the platform, and if we talk about Microsoft, then the US-based technology giant has invested in Flipkart, Ola, and Reliance Jio for the cloud business. The main reason behind these partnerships is to give a tough competition and to increase market share against Amazon Web.

The Jio and Facebook deal came as a shock for all digital payments especially Paytm which is serving 350 million users in the country, while the telco has more than 388 million customers on its platform, and continuously attracting Vodafone-Idea customers.

In fact, Paytm is not making a profit as its parent company has reported Rs. 500 crore losses. So, there are chances that the fundraising might help the app to bring new strategies against the Jio's and Facebook platform.

Meanwhile, a new report by Razorpay said that the digital transaction has been decreased by 30 percent, ever since, the lockdown was announced as people are spending money only on essential items due to restrictions.