Paytm Money to raise $68.3m from parent firm, looks to break even in 18 months

Photo: Reuters

Wealth management platform Paytm Money will raise an additional 500 crore from parent One97 Communications Ltd (OCL) as it looks to achieve break-even in the next 12-18 months, said a top company executive.

The company, which launched futures and options (F&O) trading on its platform on Wednesday, aims to have nearly 100 million users over the next 3-5 years.

Presently, the options trading feature will be provided as early access to limited users, with the platform expecting to open up the offering to a larger audience by the end of January.

With the launch of F&O, Paytm Money, which has close to 6 million users currently, is aiming at an overall daily turnover of 1.5 trillion and 1 million trades a day in 18 to 24 months.

“Through the release of newer products, we are expanding our monetization capabilities and will look to break even in the next 12-18 months,” said Varun Sridhar, chief executive officer (CEO), Paytm Money, in an interaction with Mint.

Paytm Money aims to target active traders with its new products as well.

Sridhar said the derivative product is designed keeping the middle-income groups in mind versus high net-worth individuals. For derivatives, the platform will allow users to create multiple watchlists, set price alerts and observe comprehensive performance charts with 180 indicators.

“We would want to give individuals the confidence to make options and future derivative trades, by simplifying the platform. However, in 2021, Paytm Money will also expand its outlook and target high-frequency traders by launching algorithm-based trading products,” he said.

Instead of any contracts and commitments with traders, Paytm Money will charge customers a flat transaction fee of 10, irrespective of the trading amount.

With Noida-based Paytm making heavy bets on financial services, OCL founder and CEO Vijay Shekhar Sharma said financial services will be the aggregated reason for Paytm’s profitability.

As monetization opens up for Paytm’s different business lines, Sharma said OCL can see the time to profitability shrinking and it may turn fully profitable in the first half of FY22.

“Paytm Money is important to the (OCL) group from a revenue break-even perspective, as it has amassed a high number of users that are paying for its different products. Paytm Money is definitely a bright spot in our profitability drive. We have taken a regulated approach through licences, for our financial service business, which will be the aggregated reason for our profitability,” Sharma said.

After launching stock trading on its platform in August, Paytm Money now offers users various wealth management solutions such as direct mutual funds, exchange-traded funds, initial public offering (IPO) investments, National Pension System, and digital gold.

The article was first published on livemint.com

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.