At a time when many Indian startups are facing acute shortage of funds, markdown in valuations with some even forced to shut down, mobile payments and digital wallet company PayTm has enough funds to last 5 years. In an interview given to Bloomberg TV, One97 Communications CEO Vijay Shekhar Sharma said the same while discussing company’s business plans and upcoming payments bank.
We have enough money in the bank to last 21 quarters if we keep spending at the same rate as last year.The last term sheet I signed was in 2014. We haven’t raised money since.
said Sharma in the interview.
The statement comes at a time when there have been reports of PayTm raising close to $400 million by June this year for its payment banks business. Earlier this year, PayTm had also borrowed 300 crores INR from ICICI bank for working capital.
Last year also, Sharma had hinted to dilute his stake in the company to infuse a capital of anywhere between $25 million to $50 million into payments bank until its operations become profitable.
PayTm, founded in 2010, has expanded from being just a mobile recharge platform to a full-fledged digital payment solutions provider enabling many offline and online cashless transactions.
It has raised about $700 million funding including the staggering $680 million which it raised from Chinese giant Alibaba in August last year. The firm was valued at $2.8 billion after that round.
Although the e-commerce arm of PayTm has been going through a similar fate like other e-commerce companies at present, it is the success of its core payments business which is going in its favour.
It is noteworthy that the core payments business of PayTm has already become profitable contributing 60% to its annual gross merchandise value of $3 Billion. However, the company is still betting big on e-commerce and aiming to reach $5 billion GMV from commerce platform out of $10 billion total GMV in this year.