Ant Financial Services, affiliate of China’s largest e-commerce firm Alibaba Group, has acquired a 25% stake in Delhi based One97 Communications.
One97 Communications, which owns mobile payment platform Paytm, will use the funds to grow its mobile payment ecosystem and further boost its commerce user base, the companies said in a statement. The company is also looking to expand its workforce to 5,000 employees from 2,000.
Finacial details of the deal have not been disclosed by the companies.
One97 runs Paytm, an online platform through which users can shop or pay utility bills, whereas Ant runs Paytm's Chinese peer Alipay.
Paytm has about 23 million users, the companies said.
Reports suggest that the deal may be worth $500 million. Consequently, deal values One97 at more than $2 billion, making it one of the most-valuable start ups in the country.
As of now, e-commerce firms in India have not its own payments service and the e-commerce market largely works on cash on delivery. Last year, Flipkart closed its payment gateway PayZippy barely a year after launching the service.
Alipay Wallet, the mobile version of Alibaba’s PayPal-like service, has more than 190 million users, according to the statement.
'With over 1 billion people, India’s payments market has vast untapped potential,” Cyril Han, vice president of Ant Financial, said in the statement. 'Paytm, as a leader in this field, is best equipped to build a mobile-payments ecosystem in the country.'
Alibaba rebranded its Alipay unit in October 2014.