Paytm is holding talks with US technology giant Microsoft for fresh funding as it looks to build its war chest in the face of rising competition in the sector, according to a report in the Economic Times (ET). 

Sources have told ET that the proposed fund raise of nearly Rs 760 crore is likely to be an extension of the planned Rs 7,600 crore fundraising that the company had embarked on last year. 

A person familiar with the talks told ET that the discussions with Microsoft had begun last year when Paytm was looking to raise funds but since Microsoft could not participate in the process then, it is likely to invest now. 

However, Paytm declined to comment on the matter when TNM reached out to the company. 

In November 2019, Paytm had raised $1 billion in a fund-raising exercise led by T Rowe Price Associates Inc, Discovery Capital and existing marque investors, SoftBank and Alibaba. 

T.Rowe Price Associates Inc, and Discovery Capital invested $400 million while SoftBank and Alibaba put in the remaining $600 million.

Meanwhile, the entire amount from this round is yet to be received, according to regulatory filings by the digital payments firm. As per the filings, only about $720 million (Rs 5,472 crore) of that capital has so far come through. 

The investment was made into One97 Communications Limited, the parent company of Paytm.

Paytm has said that it’s strategy is to capitalise on the 500-million strong base in India of internet-connected mobile phones for its digital payments business.

Vijay Shekhar Sharma, Founder and CEO at Paytm has stated, "At Paytm, we are committed to bringing half a billion Indians to the mainstream economy by onboarding them in the formal financial ecosystem. This new investment by our current and new investors is a reaffirmation of our commitment to serve Indians with new age financial services."