Acquisitions

Paytm has agreed to sell its stake in Japanese payments firm PayPay to SoftBank for $279.2 million, as the Indian fintech giant focuses on divesting non-core assets following a challenging regulatory crackdown earlier this year. The stake in PayPay, which Paytm acquired six years ago through acquisition rights, represents a significant piece of its international portfolio. This move comes on the heels of a broader restructuring effort, which included the sale of Paytm’s entertainment ticketing unit to Zomato for $246 million in August. PayPay, a leading payments app in Japan, is controlled by SoftBank and Z Holdings, the parent company of Yahoo Japan. The sale is expected to bolster Paytm’s cash reserves, increasing them to $1.46 billion. This cash infusion is critical as Paytm aims to reclaim market share in India’s intensely competitive payments landscape. Earlier this year, regulatory restrictions on Paytm’s banking affiliate triggered a customer exodus to rival platforms, severely impacting its market position. The divestment aligns with Paytm’s broader strategy to focus on its core Indian business, which has shown signs of recovery. Since June, shares in Paytm have nearly tripled after India’s payments regulator reinstated its ability to onboard customers to its flagship UPI (Unified Payments Interface) service. Despite the positive momentum, Paytm’s first-ever quarterly profit in September was primarily driven by asset sales rather than operational gains, underscoring the challenges it faces in achieving sustainable profitability. In a statement, Paytm expressed gratitude for its collaboration with SoftBank and PayPay: “We are grateful to [SoftBank CEO] Masayoshi-san and the PayPay team for giving us the opportunity to create a mobile payment revolution in Japan. We remain fully committed and will continue to support PayPay’s product and technology innovations in the future. We are working on introducing new AI-powered features to accelerate PayPay’s vision in Japan.” The sale also marks the conclusion of Paytm’s partnership with SoftBank, a relationship that began when SoftBank’s Vision Fund became an early investor in Paytm. SoftBank divested its remaining shares in Paytm in June, signaling the end of their formal ties. This latest move by Paytm reflects a shift in focus towards streamlining its operations and capitalizing on its renewed momentum in the domestic market, even as it remains open to supporting innovations in its former international ventures.