Paytm startup story
Vijay Shekhar Sharma

Paytm, India’s largest mobile commerce platform, is responsible for as much as 50% pecuniary transactions in today’s day and age. Less commonly known as Paytm E-commerce Pvt. Ltd or Paytm Payments Bank Pvt. Ltd, the startup is an Internet marketplace and a mobile payment application.

Founded on the 1st of January in 2010, the rapidly developing startup has its headquarters in Noida, India. Paytm has its branches in several other places such as Bengaluru, Chennai, Kolkata and Mumbai. The 8 year old company is One97 Communications‘ flaghsip brand. One97’s backing includes marquee investors like Alibaba Group, AliPay, SAIF Partners and Silicon Valley Bank.

Paytm has seen a dramatic growth over the past 8 years. Its ubiquity is a result of its user-friendly base. The startup is gradually taking over physical fiscal exchanges which might cease to exist altogether in the near future. Paytm serves people looking to make cashless transactions and goes with the tagline “Paytm karo.” The online payment system with a high customer base and acceptance’ targets young and middle-aged people from tier 1 and tier 2 urban cities.

Paytm has a cornucopia of features on its app. It has positioned itself as a ‘super app’ which facilitates payment transactions of all sorts under one option. The company provides services such as payment of utility bills, mobile recharges, movies tickets, event bookings and travel. In addition to that, it facilitates payments at grocery stores, restaurants, toll booths and pharmacies with the Paytm QR Code. With the existing peer-to-peer and peer-to-merchant transactions, it has now included bank-to-bank transfer all under one umbrella.

Paytm has been dominating the market with several innovative initiatives such as Paytm Mall. Paytm Mall is an online shopping portal with a variety of products ranging from imported goods, kids wear, women’s clothing, men’s wear, eyewear, appliances et cetera. Launched in 2017, the app allows consumers to shop from 1.4 lakh registered sellers.

Paytm is an acronym for Pay Through Mobile. Abhishek Rajan, an employee of One97 Communications, was the reason for the nascency of the concept. However, it was Vijay Shekhar Sharma who finally founded the company in 2010.

A boy from a very humble background, Vijay Shekhar Sharma was born in Aligarh, Uttar Pradesh and was admitted in a Hindi medium school during the initial years of his education. When he was twenty, he moved to Delhi for further education where he found it extremely cumbersome to cope up with English as the language of instruction. In order to teach himself English, he read newspapers and magazines religiously. He was studying in the Delhi College of Engineering. While he was there, he built a website called indiasite.net. Two years later, he sold the website for a million dollars.

On the business front, Vijay Shekhar Sharma started out as the Tech Head for India Today in 1999. He worked there for a year before he founded One97 Communications in the year 2000. The Paytm founder has since been the founder and CEO of the industry. The businessman has won oodles of awards in the past three years. Some of them are: CEO of the Year by the SABRE Awards, 2015, The Economic Times, Entrepreneur of the Year, 2016, The Exchange4media Group Impact Person of the Year, 2016, Honorary doctorate, Amity University Gurgaon, 2016

India Today magazine ranked him #18th in India’s 50 most powerful people of 2017 and GQ India named him among the 50 Most Influential Young Indians for 2017. Vijay Shekhar Sharma’s real-time net worth, as of 2018, is $2.2Bn. He is one of the biggest beneficiaries of demonetisation which happened in November 2016. According to Forbes, Paytm has notched up more than 310 million users and 16 million transactions daily.

How did the company start?

The 9/11 attacks deepened the The Great Recession which shattered Sharma’s dreams to kick-off a startup. Under obligations, he worked as a consultant due to lack of opportunities in order to pay for his bread and butter. However, he was always on a lookout for business opportunities with the growing popularity of smartphones. He started One97 Communications in 2000 soon after he quit his job at India Today. Struck with the idea of doing away with plastic money, he wanted to make monetary transactions more accessible. In 2011, he put 1% of his equity, which was $2 million at the time, in what is called Paytm today.

He said to his board members who were skeptical about this venture, “This is for all of you, if I waste the money that we put on the site.” He adds, “There is no fun in doing what others ask you to do, the real fun is in doing what people say you can’t do.”

It was because of Vijay Shekhar Sharma’s conviction that Pay Through Money, Paytm’s initial name, grew the way it did. The growth graph of Paytm has grown steeply over the last 8 years leading it to become the only payment and e-commerce company to be valued at several billion dollars. Moreover, in 2012, an event organized by Franchise India called ‘Entrepreneur India’ honoured Paytm with “The Most Innovative Startup Of The Year” award. In 2014, ‘Apple store’s best app’ was awarded to Paytm and  Vijay Shekhar Sharma was bestowed ‘The Most Innovative CEO’ award.

Major investors of the startup include MediaTek, Alibaba, Venture Capitalist, SAIF Partners, Abt Financial, SoftBank, Berkshire Hathaway et cetera. Paytm is the only company to have received funding from the world’s largest e-commerce company, Alibaba with a 25% stake in it. It is one of the few privileged companies to have received personal investment by the renowned Indian magnate Ratan Tata.

In August 2015, the Reserve Bank of India granted an ‘in-principle’ approval for Payments Bank to Paytm. Paytm subsequently launched the Paytm Payments Bank to make banking and financial services to half-a-billion un-served and under-served Indians. In 2017, Paytm received a massive funding from Softbank which shot its valuation up to approximately $10 billion. In August 2018, Berkshire Hathaway invested $356 million for 3-4% stake in Paytm. Later in 2018, investors such as Alto Pharmacy, Forge.al, OYO, Cross River Bank and Neuron Mobility funded the startup. The total money raised rounded up to $270 million.

As of 2018, the total number of registered Paytm users is $300 million with over 7 million merchants. The average amount of monthly transactions on Paytm is over $4 billion. The average monthly users are 92 million. The total revenue of the startup shot up by a significant 38.6% and is now at a whopping $8.2 billion. Its annual revenue is $50.6 million with 4,959 employees working under it. The app has been downloaded a total of 100 million times on PlayStore.

Presently, Paytm is planning on partnering with BigBasket in order to challenge the dominance of Amazon and Flipkart in the market. Paytm hopes to integrate BigBasket on its app to ensure a seamless experience for the consumers. According to TechCrunch, Paytm is looking to rival Whatsapp by adding person-to-person communication, games and other mobile content. The startup is hoping to add text, audio and video services all under a single application.

Paytm is attempting to kill competition with generous cashback offers and discounts. However, it has a number of emerging competitors including Free Charge, Mobikwik, Oxigen et cetera. The founder and ex-CEO of Free Charge is Jason Kothari while that of Mobikwik is Bipin Preet Singh. Their annual revenue is $5 million with an estimated 220 employees. Their headquarters are in Gurugram, Haryana. Oxigen was founded in 2004 by an IIT Roorkee alumnus. Anchored in Gurgaon, it has a customer base of more than 150 million.

Paytm is undoubtedly the predominant payment application which is gradually branching out to several other online businesses. What are the odds of it becoming the most popular ‘super app’ that it has positioned itself to be? Share your thoughts in the comments.

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