Intensifying the competition in Indian digital payment space worth over USD 200 billion, country’s most valuable startup, One97 Communications–the parent of digital payments company Paytm–is in talks with Alibaba’s fintech arm Ant Financial, and SoftBank to raise USD 2 billion, at an upward valuation of USD 16 billion, Bloomberg reported, citing a source close to the development.

US-based hedge fund, Discovery Capital Management is also likely to participate in this round, which will be evenly split between equity and debt funding.

Paytm was speculated to be valued at USD 12 billion last Augustwhen it received USD 300 million from Warren Buffett-led Berkshire Hathaway. The development comes six months after the Noida-headquartered company was reportedto be in discussion with SoftBank and Ant Financial for an investment of USD 1.5 to 2 billion. The talks, that seemed to have gone cold then, is finally materializing.

However, another report by a local newspaper Economic Times that quoted two people privy to the matter, said US-based asset manager T Rowe Price will lead the funding round, which will not be more than USD 1 billion. KrASIA couldn’t independently verify the numbers.

“T Rowe Price is in talks to invest around USD 150-200 million, with existing investors SoftBank and Chinese e-commerce giant Alibaba expected to infuse the rest of the capital. Some Saudi-based funds may also join in,” one of the two sources told Economic Times.

Headquartered in Baltimore, Maryland, 82-year-old T Rowe Price has USD 1.13 trillion of assets under management, with the clients and shareholders in 42 countries. In India, the firm had previously bet on Flipkart in December 2014 with about USD 100 million when the homegrown e-tailer raised USD 700 million round which raised its valuation to USD 11 billion, making it the world’s second-most valuable startup after Uber at that time.

In August this year, Paytm founder Vijay Shekhar Sharma, in an interview with Mint claimed the company’s valuation had already jumped 25% to reach USD 15 million after several employees sold their shares to US-based investors earlier this year.

“Esops (employee stock ownership plan) worth USD 150 million were sold by Paytm’s employees to New York-based investors nearly three months ago, valuing the company at USD 15 billion,” Sharma said in the interview, adding that he was not looking to raise funds this year.

For the financial year 2019, the company reported a revenue of Rs 3232.01 crore (USD 453 million), an increase of 5.8% compared to previous financial year, while its losses surged 162.9% to Rs 4217 crores (USD 591 million).

Amidst the heavy losses and increasing competition from rivals including Flipkart-owned PhonePe, Google Pay and Amazon Pay, the new round of funding is crucial for Paytm to propel its growth to the next level.

As of July, the Indian digital payments firm had almost 140 million monthly active users and 450-million-plus registered users. In August, Paytm allocated USD 105 million to expand its active monthly users to 250 million by March 2020. On the merchant side, the company claims to have more than 13 million retailers onboard. The company recently claimed to have recorded a gross transaction value (GTV) of USD 100 billion on its platform in FY19.

In September, Sharma publically made a statement that the company would start preparations for an initial public offering (IPO) within two years.

Meanwhile, rival PhonePe is reportedly looking to raise USD 1 billion at a valuation  of USD 10 billion through primary and secondary sale of shares. According to media reports, Walmart, which owns Flipkart, and by extension, PhonePe, is looking to make the payments arm a separate entity to unlock its real value.

A 2018 report by investment banking firm Credit Suisse Indian digital payment industry is expected to grow to USD 1 trillion by 2023.