Financial services, gaming strategies to keep Paytm relevant in current times, says CEO

Vijay Shekhar Sharma at the Asia PE-VC Summit 2018 organised by DEALSTREETASIA

As the lockdown to contain Covid-19 extends, Indian startups are trying to figure out strategies to keep them afloat. The digital payments industry has witnessed a 40% decline in overall payment volumes in March, and companies are now shifting gear to an online-only approach to cover for the decline of payments at offline kirana stores.

In an interview, Vijay Shekhar Sharma, founder and CEO, Paytm spoke about growth being impacted by a quarter, hiring and new verticals. Edited excerpts:

One97 Communications Ltd (OCL, Paytm parent) had plans to be profitable in the next 18-24 months. Has that changed with the current scenario?

Our incremental revenue plan would be extended by a quarter. But, owing to our digital-first strategy, post the next quarter, we see on a group level, things will return to normal. We are confident that our losses on a year-on-year basis will be down, as we see revenues from other verticals pick up, in spite of an impact on verticals like travel and entertainment.

An important thing to note was while our travel and entertainment verticals were breaking even, they would spend these revenues on themselves. So while they continue to be on our books, from a revenue contribution perspective, we aren’t seeing an impact.

How does this impact your IPO plan?

As we have said in the past, Paytm’s first goal is profitability. It is only after that we will set our roadmap for an IPO. But we are considering individual verticals and businesses under the OCL group for an IPO, depending on their profitability.

With travel and entertainment verticals impacted, which verticals will bail out Paytm?

We are focused on our financial services execution strategy including insurance, wealth through Paytm Money and even banking. These verticals will outpace the impact on segments like travel and entertainment, in terms of our revenue.

We are already seeing early signs of this, insurance volumes are up by net 500% daily. We are also working on remote opening of Paytm Bank accounts and volumes on Paytm Money are also up. We are pushing our content strategy (including gaming) and learning that monetisation will come in due course as brands start advertising again.

Do you see an impact on launching newer verticals or hiring?

We are hiring right now in senior profiles and expanding our financial services business, so you will see net additions in hiring on a year-on-year basis. As far as commerce is concerned, we expect a delay in our O2O (Online-to-Offline) focussed goods strategy. But with consumers becoming aware of online purchases, we will have a significant uptick in the online consumer base.

Have digital payments taken a big impact on Paytm’s platform which is your core offering?

Not really, we saw a 15% increase in overall payment transactions last month, on the Paytm platform. This is because of categories like insurance, bill payments and wealth management, when we look at it from a holistic level. So, we are not anticipating a fall.

OCL has seen the 2008 recession and now this slowdown. How do you evaluate both the situations?

2008 impacted a certain industry, but the impact of 2020 is on every country and company. My understanding is that the cash in the bank will be the real decider, and companies should avoid experimenting large.

Being conservative is the key when it comes to operating cost and reserve cash will be the real king. Companies should slow down on lending operations, and we were lucky in some sense to not have a landing page for that segment yet

How are these learnings incorporated in Paytm’s context?

Even we do not know how long the current situation around Covid-19 will last. We foresee a quarter worth of impact. There is no doubt that we will be doubling down on existing categories like payments, content and gaming and will push usage in Tier 3 and 4 geographies. With our financial services strategy, digital payments and content strategy, we continue to be extremely relevant today.

This 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.