Ant Financial Services Group, an Alibaba Group affiliate, announced today that it will take a 25 percent stake in India’s One97 Communications as part of a strategic agreement. Ant Financial runs Alipay, China’s largest online payment service, while One97 oversees Paytm, India’s leading mobile payment platform.
The companies did not disclose how much the stake in One97 is worth, but it represents Ant Financial’s first investment in India.
Alipay Wallet, Ant Financial’s mobile payment app, currently claims 190 million users, while Paytm says it has more than 23 million users.
Last month, reports surfaced that Alibaba Group and Ant Financial (which was spun off from Alibaba Group in 2011) were in talks to buy a stake for about $550 million in One97. When asked by TechCrunch if the 25 percent stake is part of the same transaction, an Alibaba Group representative said the investment is being undertaken by Ant Financial alone and is not related to Alibaba Group.
Alibaba co-founder and chairman Jack Ma, who still owns a stake in Ant Financial, has said that he is interested in making more investments in India, in part because Indian suppliers are the second-biggest users of Alibaba’s sites after users from China.
Paytm says it will use Ant Financial’s investment to grow its mobile payment platform and acquire more users for its online commerce business. In turn, the strategic agreement allows Ant Financial to take a stake in India’s rapidly growing e-commerce market, which is expected to reach $6 billion this year, a 70 percent increase over its 2014 total revenue of $3.5 billion, according to Gartner.
“With over one billion people, India’s payments market has vast untapped potential. As smartphone use continues to rise in India, we see great opportunity in the mobile wallet space and Paytm, as a leader in this field, is best equipped to build a mobile payments ecosystem in the country,” said Ant Financial vice president Cyril Han in a prepared statement.