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Business

Jack Ma-led Alibaba Exits Paytm Mall, Sells 43% Stake For Rs 42 Cr

After Ma sold his stake back to the company along with other investors, total 43 per cent was bought back by Paytm at a mere 42 crore, the total valuation of the company comes up to just around Rs 100 crore against the total of USD 3 Billion that it showed as its value back in 2020.

Chinese tech tycoon Jack Ma (Photo: Twitter)

PAYTM Mall has devalued from a company worth USD 3 billion to mere Rs 100 crore after Jack Ma’s Alibaba and his financial firm Ant Financial exited the company. “Five years after making its biggest bet in India’s e-commerce market, Jack Ma-led Alibaba and Ant Financials have exited Paytm E-commerce Pvt. Ltd, the parent entity of Paytm Mall,” a live mint report said.

After Ma sold his stake back to the company along with other investors, total 43 per cent was bought back by Paytm at a mere 42 crore, the total valuation of the company comes up to just around Rs 100 crore against the total of USD 3 Billion that it showed as its value back in 2020.

“Paytm Mall, inspired by Alibaba’s T-mall in China, raised USD 200 million in its first funding from Alibaba at about USD 1 billion in 2017. In total, the company raised more than USD 800 million from Alibaba, Ant Financial, SoftBank, Elevation Capital (earlier SAIF Partners), and eBay,” the report said.

The company said that despite investing significant amounts of capital in growing its business and expanding market share, the company suffered operational losses. It added that as the online business space is evolving rapidly with the onset of unique business models, changing technologies and new regulations, it is expected that additional capital and efforts will be required to be committed.

“The sector continues to be highly competitive and is marketed by the presence of several large competitors. Finally, the ongoing pandemic has thrown up unique challenges for different businesses, and the company has also had to deal with declining market economics and demanding circumstances that impose continuous pressure on financial metrics,” the company said adding against this very backdrop, the shareholders exited.

The Paytm has added that the company was resolved to pursue the path of a capital reduction and also extinguish equity shares and pay surplus cash to the specified shareholders. “Upon completion of the capital reduction, the company will have the right balance of the capital and shareholders, to build a path of revival and growth on a new trajectory,” it said.

Days ago, Paytm had announced that it would initiate and now focus on an Open Network for Digital Commerce (ONDC) as “its primary focus and explore opportunities in the exports business in place of traditional physical goods (involving) e-commerce”.

As per reports, it is suggested that ONDC will be a game changer in the UPI segment and it will prove substantial with regard to payment exchanges when it comes to online trading of goods.