Alibaba-backed companies Paytm, AGTech form JV for online gaming
Paytm, run by One97 Communications Ltd, has agreed to set up an online gaming joint venture in India with Hong Kong-based lottery firm AGTech Media Holdings Ltd.
AGTech Media’s parent, AGTech Holdings Ltd, said in a regulatory filing to the Hong Kong stock exchange that it will hold a 45% stake in the joint venture while Paytm will hold the remaining.
AGTech Holdings is owned by Chinese e-commerce giant Alibaba Group’s Ali Fortune Investment Holding Ltd and Ant Financial. Also, Ant Financial holds a stake of more than 30% in One97 Communications, AGTech Holdings said in its filing.
As part of the agreement, Paytm will invest $8.8 million and AGTech $7.2 million in the new venture. The JV’s board will have five members; Paytm will nominate three and AGTech Media two.
“The joint venture will offer innovative mobile games and user engagement activities to Indian consumers by leveraging the group’s decade-long experience in creating mobile entertainment products and Paytm’s massive distribution network to develop mobile games in India,” AGTech said.
This venture marks AGTech’s first major overseas expansion. “International markets represent an untapped and enormous opportunity, and this joint venture is a significant breakthrough which lays the foundation for further international expansion in the future,” AGTech said.
Noida-based One97 has, in recent years, ventured beyond its traditional mobile wallet offering into the payments banking and e-commerce sectors.
Last year, Vijay Shekhar Sharma-led Paytm had created two separate entities, Paytm E-Commerce and Paytm Payments Bank Ltd, to run its e-commerce and banking services, respectively. In December, the company said it was merging its wallet business with the payments bank to comply with the Reserve Bank of India’s directions.
In March this year, Paytm E-commerce raised $200 million (Rs 1,334 crore) from Alibaba and existing investor SAIF Partners. The investment increased the stake of Alibaba and its affiliate Ant Financial (the parent company of Alipay) in Paytm E-Commerce from 40% to 62%.
In May, Paytm raised $1.4 billion (about Rs 9,000 crore) from Japan’s SoftBank Group Corp in the largest funding round from a single investor in India.