Alibaba’s financial services arm Ant Financial announced Thursday that it has acquired a 25% stake in India’s One97 Communications. The companies did not disclose how much Alibaba paid for the stake, but sources familiar with the matter told Nivedita Bhattacharjee of Reuters that the deal valued One97 Communications at more than $2 billion.

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Alibaba to offer strategic and technical support to Paytm

One97 owns mobile payment platform Paytm, which has seen exponential growth in the past few years. One97 founder Vijay Shekhar Sharma said that Ant Financial, which operates Alipay, will be issued new shares in the company. Last month, Business Standard reported that Alibaba co-founder Peng Lei would join the Paytm board.

The announcement comes less than a month after ValueWalk reported that Alibaba was in advanced talks to invest about $550 million in One97 to tap into India’s booming smartphone and e-commerce market. During his visit to New Delhi in November last year, Alibaba founder Jack Ma had expressed interest in the Indian market.

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One97 Communications is backed by Intel Capital, SAIF Partners, Saama Capital and Sapphire Ventures. The companies said in a joint statement that Paytm will use the funds to scale up its services and grow its mobile payment business. Ant Financial will provide Paytm with technical and strategic support. Cyril Han, the VP at Ant Financial, said that India’s payments market has vast untapped potential.

Paytm has 23 million users

Paytm currently has more than 23 million active users. It is much smaller than Ant Financial’s Alipay, which boasts of 190 million users. Goldman Sachs and Citigroup advised One97 on the deal. The Chinese e-commerce giant has been spending aggressively on acquisitions. In October, the company invested $50 million in entertainment apps maker Peel. Last month, Alibaba picked up a stake in Israeli QR code firm Visualead. On January 14, the company announced that it had acquired a majority stake in digital marketing platform AdChina.

Alibaba shares fell 0.19% to $89.83 in early trading session Thursday.

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