Paytm Sells PayPay Stake to SoftBank
Indian firm Paytm has agreed to sell its stake in Japanese payments firm PayPay to SoftBank for $279.2 million. This comes as the firm looks to offload non-core assets after a challenging regulatory crackdown earlier this year.
The sale of Paytm’s stake in PayPay, which was acquired through rights six years ago, follows a period of restructuring that saw the firm also sell off its entertainment ticketing unit to Zomato for $246 million back in August.
PayPay, controlled by SoftBank and Yahoo Japan parent company Z Holdings, is a leading payments app in Japan. The stake sale will boost Paytm’s cash reserves to $1.46 billion. This cash injection comes at a critical time as the company looks to regain ground in India’s fiercely competitive payments market.
“We are grateful to [SoftBank CEO] Masayoshi-san and the PayPay team for giving us the opportunity to together create a mobile payment revolution in Japan,” Paytm said in a statement.
Paytm’s Challenges and Recovery
Earlier this year, Paytm’s banking affiliate faced severe restrictions from regulators, leading to a mass exodus of customers to rival services. However, since June, shares in Paytm have nearly tripled after India’s payments regulator allowed the firm to resume adding customers to its flagship UPI service.
Despite these difficulties, Paytm reported its first quarterly profit in September. This was largely due to proceeds from asset sales, rather than operational improvements.
Paytm’s Future Commitment to PayPay
While selling its stake, Paytm is committed to continue supporting PayPay’s product and technology innovations.
“We remain fully committed and will continue to support PayPay’s product and technology innovations in future. We are working on introducing new AI-powered features to accelerate PayPay’s vision in Japan.”
End of Paytm’s Relationship with SoftBank
Saturday’s deal marks the end of Paytm’s relationship with SoftBank, which divested its remaining shares in June after being an early backer through its Vision Fund.
Wrap Up
- Paytm sells its stake in PayPay to SoftBank for $279.2 million.
- The sale will boost Paytm’s cash reserves to $1.46 billion.
- Paytm remains committed to supporting PayPay’s product and technology innovations.
- The deal marks the end of Paytm’s relationship with SoftBank.
Source: TechCrunch
