Chinese e-commerce giant Alibaba Group and its subsidiary Alipay are in advanced talks to invest $550 million in the India’s One97 Communications. Sources familiar with the transaction told Reuters that the deal will value One97 at $1.9 billion. The Indian company operates an online marketplace and payment platform called Paytm. Sources said the investment will officially be announced later this month.

Alibaba Group Holding Ltd To Invest $550M In India's One97 Communications

Alibaba and Alipay members to sit on One97 board

Under the terms of the deal, Alibaba and Alipay will own a little over 30% stake in One97. The Economic Times has learned that one member each of Alibaba and Alipay will sit on the company’s board. Launched by Vijay Shekhar Sharma in late 2010, Paytm was initially a mobile recharge and utility bill payment service. But it quickly grew into a full-fledged e-commerce marketplace focused exclusively on mobile.

One97 will issue new shares to Alibaba and Alipay, diluting the holdings of existing shareholders. The company currently employs 2,000 people, and almost 50% of them hold equity in One97. Sources told The Economic Times that over 100 employees own stakes worth at least $160,000 each. Its rapidly growing app Paytm has more than 20 million registered users.

How will One97 use Alibaba’s money?

Existing investors in One97 include Intel Capital, SAIF Partners and SAP Ventures. One97 did not confirm the deal with Alibaba. But the Noida-based company said that it was in the process of raising fresh funds, and will make an official announcement once the process is complete. During his visit to India in November, Alibaba CEO Jack Ma had emphasized that he would step up investments in India.

Money from Alibaba will be used to expand Paytm services with an aim to dominate the online payment business in India. International investors including Singapore’s Temasek Holdings and Japan’s SoftBank have invested billions of dollars in Indian startups in the past few years. In October 2014, SoftBank invested $627 million in e-commerce company Snapdeal.

Alibaba shares rallied 1.92% to $105 in pre-market trading Monday.