Paytm to invest $150-200 million in start-ups

Will look at one large investment of $100 million, though the sweet spot would be $10-15 million ticket size

Mobile commerce platform Paytm has said it has earmarked $150-200 million to invest in start-ups over the next 18 months.

Kiran Vasireddy, senior vice-president at Paytm, said the company would invest in 10-15 companies at $10-15 million each. He added the company is also open to making one large investment of around $100 million.

"We have allocated $150-200 million towards these investments over the next 18 months," said Vasireddy. He, however, did not comment on the firm’s fund-raising plans to support its future investments.

Paytm has already invested in Jugnoo, Zovi, Gadgets 360°, among others.

Last week, the company announced $10 million investment in the first round of institutional funding for logistics data start-up LogiNext.

Paytm will primarily look at companies in the tech start-up and logistics space to invest.  

It seeks to leverage the technology of the start-ups, which could add value for Paytm and its partners. In return, the start-ups would get access to Paytm's user base, traffic, technology and management capabilities, besides funding. According to Vasireddy, Paytm does 2-2.5 million transaction in a day.

Quoting the investment in LogiNext, he said while large logistics companies have tech capabilities, smaller players have limited access to good technologies.

“To solve this, we are building a strong logistics cloud network for our merchants and courier partners; our investment in Loginext adds muscle to our cloud offerings."

Loginext’s big data analytics platform will help courier companies to bring in more efficiency in their delivery network by route optimisation and real-time tracking of their resources.

He said Paytm would look at acquiring 20-40 per cent stake in investee companies. The key parameters it would look at include founding team and their passion; business model of the company; how good the team's execution is; how innovative is the company and what difference it can make; and how effect its solutions are.

He said last few years, the start-up eco system, including infrastructure, enabling things and government support, is changing and lot of product companies have come, while traditionally the focus have been on service which is a good and it is in line with Silicon Valley.