Paytm Builds On Ecosystem Play As It Eyes Investments In AI, Big Data Focused Startups

Noida-headquartered digital payments company Paytm, on Monday (November 11), announced that it will now invest in early-stage startups that build complementary technologies augmenting the digital ecosystem.

The company said it has set aside INR 500 Cr ($70 Mn) to invest in tech startups enabling AI-based technology and big data solutions to solve complex problems unique to India.

Vikas Garg, deputy CFO at Paytm said, “We are well aligned with our country’s mission to ensure the benefits of the digital revolution reach the last mile. We partner with startups who have capabilities that augment the digital ecosystem for the next wave of growth.”

Paytm said it typically invests INR 200 Cr- INR 250 Cr every year in IPs or companies building complementary technologies such as Insider, Nearbuy, Loginext, TicketNew, Hungerbox, Nightstay, QRQL, and RecruiterGrid.

Here’s a look at recent investments by Paytm:

• Bengaluru-based food catering startup Hungerbox raised INR 15.99 Cr\ in Series C funding round from Paytm parent company One 97 Communications and Sabre Partners Trust.
• Paytm invested $16 Mn in Gamepind Entertainment Pvt Ltd, a mobile gaming offering, in a joint venture (JV) with AGTech, a Hong Kong-based mobile games development company.
• Paytm acquired Balance Technology to leverage Balance Tech’s data-driven insights and track record in building intelligent and elegantly designed products.

Founded in 2010, Paytm is one of the first digital payment platforms in India. Besides individual transactions, merchant payments and PoS systems, it has ventured into financial products such as a payments bank and credit cards. It also supports a native wallet and UPI for payments and transactions.

Paytm is also active in the ecommerce space with Paytm Mall, and has also ventured into event ticketing services, wealth management, insurance, and gold services.

Paytm has close to 130 Mn monthly active users and more than 450 Mn registered users, as of July 2019. The platform planned on targeting 250 Mn new customers, and onboard new merchants in Tier 2 and Tier 3 cities and towns.

Further, Paytm will be looking to get listed on the stock exchanges after it starts generating profits by 2021. It recently said that it has achieved profitability at the contribution level. Vikas Garg, deputy CFO, Paytm said that the company’s contribution margin has grown from a loss of 30% to profit of 12% of the revenue.

For offline payments, the company aimed to enable 20 Mn retail merchants to accept digital payments through Paytm QR. Further to grow offline merchant payments, Paytm said it will invest INR 1,000 Cr more this year. The company wants to gain a 2/3rd market share of the mobile payment market in India.