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Advertisements of Paytm, a digital wallet company, are seen placed at stalls of roadside vegetable vendors in Mumbai, India,Reuters file

Vijay Shekhar Sharma led Paytm has secured $1 billion from new and existing investors, including Japan's SoftBank Group and China's Ant Financial in the latest round of funding. The funding has spurred the valuation of One97 Communications Ltd, which operates Paytm to a whopping $16 billion from its $15 billion value till August when some of its employees sold their shares in a secondary share sale to unnamed New York-based investors. The funds are expected to ramp up the finance of the digital payments firm to make in-roads into India's hinterland amid cut-throat competition from Google Pay and Walmart Inc.-owned PhonePe Pvt. Ltd.

T. Rowe Price joins list of investors in Paytm

Notably, Paytm has been scouting for investors and shore up funds since the beginning of the year amid increasing losses. As per earlier plans, One97 Communication, Paytm's parent was targeting at least $ 2 billion but later the size of funding was slashed. In a statement, Paytm announced that the company raised a fresh round of equity from existing shareholders including Ant Financial, an affiliate of Alibaba Group Holding Ltd, SoftBank Vision Fund and Inc. Discovery Capital. Besides, new investors like T. Rowe Price Associates has also joined Paytm's list of investors. However, Paytm did not disclose the break-up of the funds invested by each fund's houses. The deal between Paytm and T Rowe Price means it is the second instance by the latter to invest in a privately held Indian technology startup, after its investment in Flipkart. Interestingly, T Rowe Price manages over $ 1 trillion in assets, globally.

The headquarters for Paytm, India's leading digital payments firm, is pictured in Noida REUTERS/Sankalp Phartiyal/File Photo

As per a report in Mint, the fresh funds would be used for growing the payments and financial services business. Paytm plans to invest ₹10,000 crores over the next three years to bring financial inclusion to areas where it is yet to take off. The company added, "In its first phase of growth, Paytm pioneered low-cost digital payments acceptability in India using its QR-code technology in local shops and retailers. Paytm, which at present serves merchants in more than 2,000 towns and cities spanning across 650 districts, aims to bring low-cost mobile-enabled financial services to rural India. The company will invest and support millions of rural Indians towards self-sustainability through job creation."

The investment has come after Paytm's rigorous efforts to raise funds since the start of the year. Last year has been tough for the digital payment company amid widening losses during the last fiscal year with a marginal jump in revenue and no clear source of revenue growth path to monetize its customer base.