• Fresh funds will help Paytm spread to the hinterland of India
• In the next three years, Paytm plans to invest 10,000 crore to introduce financial inclusion to more underserved users in India.

One97 Communications Ltd, operating Paytm, raised $1 billion from new and existing investors, including the SoftBank Group of Japan and the Ant Financial of China, said a person familiar with the development.

The funds would help the digital payment firm to beef up its finances to make a deeper foray into the hinterland of India in the midst of intensifying competition from the PhonePe Pvt owned by Google Pay and Walmart Inc.

The fundraising boosted Paytm’s valuation to $16 billion, from the $15 billion it was listed at when some of its employees cashed out their shares in a secondary sale to undisclosed New York-based shareholders in August.

Paytm said it raised a fresh round of equity from existing shareholders like Ant Financial, an Alibaba Group Holding Ltd affiliate, and SoftBank Vision Fund on Sunday. New investors, including T, also joined them. Associates of Rowe Price, Inc. The round was also attended by Discovery Capital, an established Paytm investor. Nevertheless, the company did not reveal the amount of funds raised.

Paytm founder Vijay Shekhar Sharma said the fresh investments will be used to grow the payments and financial services business.

Over the next three years, Paytm plans to invest around 10,000 crore to bring financial inclusion to more underserved users throughout India.

Paytm pioneered acceptance of low-cost Digital Payments in India using its QR-code technology in local shops and retailers in its first phase of growth. Paytm, currently serving merchants in over 2,000 towns and cities across 650 districts, aims to provide rural India with low-cost mobile financial services that are enabled. The organization will invest and help millions of rural Indians through job creation towards self-sustainability, “he said.

Since the beginning of this year, Paytm has been in talks to raise funds in the face of rising losses, increasing competition in the digital payments market, and no clear source of revenue growth to monetize its customer base.

In India, digital payments have risen to 22.4 transactions per person more than five times since 2015 in the year ended March 31, Reserve Bank of India shows figures.

According to a report by NITI Aayog last year, the market is expected to expand to $1 trillion by 2023.

In digital payments, Paytm is involved in a market share fight with Google Pay and PhonePe. The digital payment firm has fallen behind its two competitors in UPI payments once the clear market leader.

Paytm is trying to become a comprehensive, margin-enhancing financial services firm, but has struggled to expand its bank and other businesses. Japan’s SoftBank has pressed Paytm to speed up its spending cuts and find new revenue streams, according to reports.

Japan’s SoftBank has been pushing Paytm to speed up its spending cuts and find new revenue streams, according to reports.