Swiss Re Grabs 23% of Paytm Insuretech for $122.6M

Digital payments and financial services firm Paytm on Wednesday (Oct. 27) announced that Switzerland-based reinsurance platform Swiss Re will purchase a 23% stake of Paytm Insuretech, Paytm’s insurance unit, for about 920 crore rupee (a bit more than $122.6 million).

Swiss Re will make a bit more than one-third of its investment upfront through equity shares and compulsorily convertible preference shares and invest the remainder in stages based on Paytm Insuretech reaching certain agreed-upon milestones. Payment Insuretech recently acquired Raheja QBE.

“We are excited to partner with Swiss Re for our insurance foray as a key strategic investor,” Paytm Chairman, MD and CEO Vijay Shekhar Sharma said in the joint announcement. “It is an important milestone in our financial services journey of taking general insurance products to the masses.

“We look forward to gaining from Swiss Re’s global insurance capabilities and building innovative products to tap into the Indian market,” he said.

Sharma will also make a personal investment in Paytm Insuretech in addition to the Swiss Re deal, but the company didn’t give any details of Sharma’s personal investment.

Both Swiss Re’s investment in Paytm Insuretech and Paytm Insuretech’s acquisition of Raheja QBE are subject to regulatory approvals.

Related: Paytm Might Fast-Track $2.2B IPO Post-Diwali

Last week, reports surfaced that Paytm might skip its pre-IPO plans and accelerate the launch of its $2.2 billion initial public offering to coincide with the end of Diwali Nov. 4, based on Paytm’s desire to streamline the IPO process and go directly to the market.

If Paytm skips its pre-IPO fundraising, it won’t be related to valuation discrepancies.

Paytm will seek a valuation in the range of $20 billion to $22 billion, one source said. Its most recent valuation put the company at $16 billion. The company’s draft red herring prospectus says it “may consider” a pre-IPO placement.

Paytm — which provides payment, cloud, eCommerce and financial services to more than 333 million customers and 21 million businesses — could soon get the blessing of the Securities and Exchange Board of India (SEBI) for its IPO.