Paytm has agreed to sell its stake in Japanese payments company PayPay to SoftBank for $279.2 million as the Indian company sells non-core assets following a bruising regulatory crackdown earlier this year.
PayPay’s sale of Paytm’s stake, which it acquired through acquisition rights under a partnership in 2018, follows months of restructuring in which the company sold its entertainment ticketing unit to Zomato for $246 million in August.
PayPay, managed by SoftBank and Z Holdings, the parent company of Yahoo Japan, is Japan’s leading payment app.
The stake sale will boost Paytm’s cash reserves to over $1.4 billion as it attempts to regain market share in India’s highly competitive digital payments market. The company’s banking arm was severely restricted by regulators in January, prompting customers to flee to rival services.
Paytm’s shares have nearly tripled since June after India’s payments regulator allowed it to resume adding customers to its flagship UPI service. The company reported its first quarterly earnings in September, but that was primarily due to proceeds from asset sales rather than operational improvements.
“We are grateful to Mr. Masayoshi and the PayPay team for the opportunity to co-create the mobile payments revolution in Japan,” Paytm said in a statement. “We will continue to support PayPay’s product and technology innovation. We are working to introduce new AI-based capabilities to accelerate PayPay’s vision in Japan.”
Saturday’s deal marks the end of Paytm’s relationship with SoftBank. SoftBank sold its remaining shares in June after becoming an early backer through its Vision Fund. People close to both companies said the Japanese group’s exit reflected a broader shift in India’s consumer technology sector.
