Paytm lines up Rs20,000 cr funding; to move into insurance, wealth mgmt
29 November 2017
Paytm, which boasts investors like Japan's SoftBank and China's Alibaba, has drawn up a massive investment plan of Rs20,000 crore over the next five years as the group expands into the digital payments, financial services and ecommerce space in India.
"In the last two years and the next three years, we would have invested Rs18,000-20,000 crore. I don't want to talk about profitability right now because we are still in an investment phase," Paytm founder and chief executive Vijay Shekhar Sharma told reporters on the sidelines of the official launch of Paytm Payments Bank operations in New Delhi.
In a subsequent interview with Business Standard, Sharma made it clear that while Paytm Mall would work with Alibaba on ecommerce, its payments and banking business partner would be the SoftBank Group, the company's majority shareholder.
Paytm, which offers mobile wallet, recharge, bill payment services, ecommerce (Paytm Mall) and ticketing services, saw a massive growth in its business after the government's demonetisation drive in November last year. It has 28 crore registered users, of which 18 million use Paytm's wallet service.
''We will offer lending, insurance and wealth management services. The battle now has moved from being a financial service or telecom provider to a data company,'' Sharma said.
He said its platform processes about 250 crore transactions annually worth of Rs80,000 crore. "We expect this to grow to Rs 1 lakh crore by the end of the fiscal. The number of merchants on our platform will also touch 60 lakh in a few months," he said.
The company will invest Rs5,000 crore over the next two years in its financial and payments services and Rs1,700 crore has already been pumped in this year, Sharma said.
"Paytm is a contribution positive business. We are not profitable yet because we are investing in marketing, cloud and customer acquisition," he said.
He added that for the Payments Bank operations, the aim is to break even in the next two years.