Online payments and e-commerce provider Paytm's parent One97 Communications is close to raising $300 million to $350 million in fresh funding that could double its valuation to $5 billion, the Mint reported.
According to the report, One97 Communications is in talks with investors including Taiwanese chip maker MediaTek Inc., Temasek Holdings and Goldman Sachs, for the new fund-raise. Existing investors such as Alibaba Group, SAIF Partners, Foxconn and Singaporean sovereign wealth fund GIC are also likely to participate.
The deal may substantially alter the ownership structure of Paytm and its parent, said the report. Paytm's valuation was $2 billion as of May 2015.
If completed, the deal, which would be the largest starup fundraise in India so far this year, will certainly rev up competition among digital payments services companies that are vying for a bigger market share as customer habits evolve to using smartphones as digital wallets.
Flipkart is the latest player in the space with plans to invest about Rs 670 crores to build out a separate digital business over the next three years, betting on the rise of mobile shopping and cashless transactions.
Other e-commerce players that are leading in this space include Amazon's India e-payments platform Emvantage, which also applied for an e-wallet licence, Snapdeal's Freeharge, as well as Mobikwik.
Indian startups have struggled to raise additional funding rounds as investors have become more demanding of business models that demonstrate a path to profitability.
The pace of venture capital investments dropped to about $2.7 billion in the first two quarters this year from a record $8.9 billion in 2015, according to a Bloomberg report which cited data by investment firm Preqin.
India also has its own 'Deadpool' list, a catalog of nearly 800 dead or dying startups compiled by Bangalore-based Tracxn Technologies.