Digital payments platform Paytm looking to start money market fund
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Digital payments platform Paytm looking to start money market fund

INDIA’s Paytm is reportedly seeking a licence to launch its own money market fund – an open-ended mutual fund investing in short-term (less than a year) debt securities that gives investors a safe place to invest easily accessible, cash-equivalent assets.

According to Bloomberg, a source close to the matter said the company – India’s largest digital payments company – had made an application to the country’s central Reserve Bank of India to start this new venture.

A money market fund would increase Paytm’s portfolio of services to over 250 million users. It will also catapult the company towards its goal of disrupting India’s finance industry, which it managed to break into when it got hold of a banking licence and started to offer gold trading this year.

SEE ALSO: India: Paytm expands to North America through app in Canada

Paytm founder Vijay Shekhar Sharma told Bloomberg recently in the next five years, the company plans to invest US$1.6 billion to broaden its wealth management, insurance and lending businesses.

The company seems to have been inspired by Alibaba Group Holding Ltd.’s financial affiliate Ant Financial, whose Yu’E Bao fund- set up less than five years ago – has become the world’s largest fund of its kind with CNY1.14 trillion (US$167 billion) in assets.

This is perhaps unsurprising, considering both Alibaba and Ant Financial are investors in Paytm, along with Japan’s SoftBank. In fact, SoftBank¬†poured US$1.4 billion of funding into Paytm in May, becoming the biggest round from any single investor in an Indian startup.