Paytm raises funds that could lead the company to achieve eventual profitability.

Paytm, an Indian online payments company, recently raised $1 billion from its current investors.

The latest round of funding puts the valuation of the company at $16 billion. Entities that have previously invested in Paytm include Ant Financial and SoftBank’s Vision Fund.

There are a variety of ways that Paytm could use this new chunk of money. Its business strategy has focused on accruing users rather than achieving profitability. The company lost $549 million in the last fiscal year. $1 billion could be used to help continue pursuing this business strategy as it seeks increased market share.

Additionally, Paytm has looked at expanding its services in order to eventually achieve profitability. These new services include insurance and lending. The company has already announced that within the next three years it plans on allocating $1.4 billion towards developing these two new services along with stockbroking. All three of these services are more lucrative than payments processing.

Paytm is also focusing on expanding its reach to rural customers. Currently, internet access is continuing to expand throughout India. This provides a growing customer base throughout India’s rural regions that Paytm can capture. Currently, 66% of India’s population lives in rural areas.

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Economics, Finance and Investing