Paytm, Hong Kong-based AGTech Media to develop games jointly
What's the story
One97 Communications-owned digital payments giant Paytm inked a joint venture deal with Hong Kong's lottery company AGTech Media, a wholly-owned subsidiary of AGTech Holdings. Both the firms would set up a gaming company (for online/mobile games) and develop entertainment products for Indian consumers. While the deal could prove instrumental for Paytm, it could also help turn around the ailing AGTech Holdings.
Information
Both firms backed by Alibaba
AGTech Holdings is owned by Chinese e-commerce major Alibaba's Ali Fortune Investment Holding and Ant Financial. Alibaba is also one of the investors in Paytm; its Ant Financial holds a stake of over 30% in Paytm's parent company One97 Communications.
Agreement
Paytm, AGTech would together invest $16 million
AGTech Holdings would invest $7.2mn and get a 45% stake in the joint venture; the rest would be held by Paytm by investing $8.8mn. The new entity would have a five-membered board; Paytm would nominate three and AGTech two. The JV would offer innovative mobile games and user-engagement activities in India using Paytm's massive distribution network and AGTech's decade-long experience.
Joint Venture
Would develop various platforms apart from games
The joint venture would not only produce games but also develop and operate several various platforms such as mobile apps, websites, and distribution channels to distribute and publish other products. According to AGTech Media, the joint venture deal would help Paytm "drive deeper consumer engagement" as users can earn exclusive Paytm rewards or discounts on their platform.
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AGTech on the joint venture
The JV marks the first major global expansion for AGTech. The firm said: "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."
Paytm
The rapid expansion of Paytm
One97 Communications' Paytm, a digital payments company, was established in 2010 by Vijay Shekhar Sharma in Noida. With Paytm E-Commerce and Paytm Payments Bank, One97 soon ventured beyond its traditional digital wallet services into e-commerce and payments banking spaces in 2016. In Dec'16, it announced it was merging the digital wallet with payments bank to comply with RBI's directions.
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AGTech on joining hands with Paytm
"This JV will enable it (new entity) to tap into the significant potential of the fast growing mobile entertainment market in the world's second most populous country. As the leading mobile payment platform in India, Paytm is the ideal local partner."