Fintech Major Paytm’s Valuation Up 25%: Vijay Shekhar Sharma

Vijay Shekhar Sharma, founder of the fintech major Paytm has reportedly said that the company’s valuation was hiked by 25% to touch $15 Bn. “Esops (employee stock ownership plan) worth $150 Mn were sold by Paytm’s employees to New York-based investors nearly three months ago, valuing the company at $15 Bn,” Vijay reportedly added.

The news comes on the back of a drop in the number of UPI transactions done through Paytm. Earlier this month, it was reported to have recorded less than 140 Mn UPI transactions in July, as compared to over 200 Mn UPI transactions in May. 

Paytm has earlier claimed that it has achieved over 600 Mn total transactions in July, which includes payments through Paytm Wallet, Paytm UPI, cards and net banking. Deepak Abbot, senior vice president at Paytm had then said that they are witnessing that Paytm wallet is more preferred for offline payments than UPI.

Overall, Paytm has claimed to reach a gross transaction value (GTV) of over $50 Bn, while clocking 5.5 Bn transactions in FY19. Paytm has earlier claimed to own around 70% market share in overall digital payments across online and offline merchants. 

Vijay has now reportedly said that Paytm is contribution positive, meaning that it is spending money to only acquire new merchants and customers. “Merchants pay us, not the customer,” he said. 

The statement is however contrary to last week’s news when, in response to a user tweet, Paytm agreed to have started charging a convenience fee. Paytm Care has said, “This is to bring in your notice that as per our updated policies, we have started charging a convenience fee in order to continue offering a wider range of services on paytm platform.”

Founded in 2010, Paytm provides multiple startups and large businesses with solutions ranging from a shareable PaytmQR code to deep integration. It enables users to process digital payments through any preferred payment mode including credit and debit cards, net banking, paytm wallet and UPI (unified payment interface).  

Paytm had also launched its own payments bank in 2017. Paytm Payments Bank is a mobile-first bank with zero charges on all online transactions (such as IMPS, NEFT, RTGS) and no minimum balance requirement. The company has also been diversifying its business with the launch of new verticals such as Paytm Mall (ecommerce), Paytm Money (wealth management), Paytm First Games (online gaming), and a recent partnership with SHEROES to launch a community platform for women.  

According to a 2018 NITI Aayog report, India’s digital payments industry is estimated to grow to $1 Tn by 2023. The report also noted that the value of digital payments will likely jump from the current 10% to over 25% by 2023.

Multiple players are trying to tap into India’s digital payments sector including PhonePe, BharatPe, and Google Pay. In July, Google Pay has reportedly recorded over 300 Mn. While, Flipkart-owned PhonePe claimed to have done more than 335 Mn UPI transactions.