The Race to Fund Indian Ventures

Source: WSJ

Read Time: 1 minutes

Chinese and Japanese investors are pouring money into India, channeling more venture money into the world’s second-most populous country than U.S. financiers.

Of the five biggest venture investments led by Chinese investors in 2017, three were rounds led by Tencent or Alibaba in e-commerce and ride-hailing startups in India and Indonesia.

Madhur Deora, chief financial officer for Paytm, one of India’s biggest e-payments firms, says the company approached Alibaba affiliate Ant Financial instead of U.S. backers for funding in 2015 because Chinese mobile-internet innovations are “way far ahead of anything that’s happened in the U.S.” Ant is preparing to raise $9 billion in a private funding round, according to people familiar with the matter, valuing it at close to $150 billion.

Ant and Alibaba eventually invested a total of around $800 million in Paytm parent One97 Communications, while SoftBank later poured in around $1.4 billion. That made the trio the biggest investors in the company, says a person familiar with the transactions, and gave them board seats. The company hasn’t had “meaningful” U.S. investors, Mr. Deora says. SoftBank led another investment of $445 million in Paytm’s online mall in recent weeks.

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