Paytm confirms valuation has reached about $10bn, 200 employees become millionaires

Softbank-backed Paytm on Monday said its valuation has reached to about USD 10 billion following a secondary sale where some existing and former employees sold part of their shares to new investors including undisclosed family offices and a few western funds.

"Company valuation rises close to USD 10 billion in latest round," Paytm told Moneycontrol.

The round saw about 200 employees of the company liquidating their vested ESOPs for Rs 300 crore.

The new valuation is a significant jump from USD 7 billion valuation of the company when it raised USD 1.4 billion from Japanese investor Softbank in in May last year. It also makes Paytm one of the biggest internet firms in the country following rival Flipkart which has a valuation of about USD 12 billion.

Interestingly, about two months ago Flipkart too disbursed USD 100 million for repurchasing the employee stock options (ESOPs) of over 3,000 present and past employees across the group companies including Myntra and Jabong besides Flipkart.

ESOPs are benefit plans that are offered to employees in the form of stakes in the company as an added benefit besides salary that are conventionally liquidated when the company goes for a buyback event.

"Paytmers who have been with the company since inception to as early as one year have benefited," the company said in a statement.

Both Paytm and Flipkart have been sharing a common investor Softbank for some time now.

Flipkart saw the entry of Softbank after a failed acquisition talk with rival Snapdeal whose primary investor was Softbank. The company raised about USD 2.5 million from Softbank in August last year in a mix of primary and secondary capital sale.

Company's founder Vijay Shekhar Sharma too had sold 1% of his shareholding in the parent company One97 Communications over an year ago for Rs 325 crore to raise money for Paytm's payments bank.

Paytm that recently set up Paytm Money for investment and wealth management products now has four verticles. Besides wealth management it has wallet, e-commerce, and payments bank.