Paytm Mall plans to use the funding to improve its technology and build up its logistics.
Softbank Investment Advisors will finance the joint venture through its Softbank Vision Fund. Japanese investment giant Softbank will contribute Rs 2,600 crore in the round while rest of the contribution will come from Alibaba.
Confirming the development, Amit Sinha, Chief Operating Officer at Paytm Mall in a media statement said, "This latest investment led by SoftBank and Alibaba reaffirms the strength of our business model, growth trajectory, execution capability and the potential of India's massive O2O model in the retail space".
The deal, which marks SoftBank's first funding in Paytm Mall, will see the Japanese entity holding over 20 per cent stake after the transaction is completed.
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The investment will also give SoftBank a deep presence in the Indian e-commerce sector. It was also reported that Paytm Mall has put a target to achieve $10 Bn gross merchandise volume run rate by end of FY19.
SoftBank's Vision Fund took roughly a fifth of Flipkart a year ago for US$2.5 billion. This will be SoftBank's second investment in an online retailer in India.
According to the company, offline stores registered on its platform drive over 60% of sales. The company has tied up with brands like Big Bazaar, FBB, Samsung, Red Tape and others, apart from smaller ones that are popular across markets.
Online marketplace Paytm E-Commerce Pvt. The platform Paytm Mall is inspired by Alibaba's T-mall in China. Previously, this third position was loosely held by Snapdeal but its downfall a year ago certainly seems to have paved the way for Paytm Mall's rise.
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