After coming to the rescue of cash-strapped Indians in the aftermath of last November’s note ban, it appears that online payment company Paytm is now offering a lifeline to those affected by downsizing, “or restructuring”, at some of the country’s high-profile tech startups.
On Friday, Paytm founder and Chief Executive Officer Vijay Shekhar Sharma sent out a tweet:
Hello, Tech/Product ppl in Delhi NCR, feeling heat of business restructuring?
We welcome you @Paytm and @PaytmMall with open arms.
— Vijay Shekhar (@vijayshekhar) February 24, 2017
He didn’t name names but the message was rather clear. In the 48 hours leading up to Sharma’s tweet, e-commerce company Snapdeal had hogged headlines in the startup space after its founders announced plans for mass layoffs across the group in a bid to turn profitable.
About 500-600 people are expected to lose their jobs in the coming weeks, including employees of Snapdeal’s payments division Freecharge. So no prizes for guessing the constituency that Sharma was targeting.
Experts including former Infosys Chief Financial Officer TV Mohandas Pai felt that Snapdeal’s fate was symbolic of the unsustainable and unprofitable model adopted by new-age startups.
Pai said Indian startups had been blowing up cash and were being run by engineers rather than businesspersons. He said investors had all believed in a winner-takes-all market, but the Indian market had too many competitors. He added that it would not be surprising if other startups suffer a similar predicament.
A day after Pai’s comments, Chennai-headquartered online hotel room aggregator Stayzilla announced it would be shutting down operations owing to tougher competition from bigger rivals and a tighter business environment.
So Paytm’s Sharma clearly senses an opportunity as more startups take steps to trim to their workforce. Even as tech startups continue to make “errors in execution”, as the Snapdeal founders said in a letter to their employees, Alibaba-backed Paytm is in its prime.
While most companies took a hit following demonetisation, Paytm’s mobile wallet service saw it grow exponentially in a couple of months as the shortage of cash forced customers to take the digital route. Its overall traffic rose 700 percent in the six days after the note ban was announced.
A fortnight ago, Sharma said that Paytm was on track to achieve a USD 10 billion annual transaction volume. The company registered a rise of 12 percent in its payments volume to Rs 5,000 crore during the month of January compared with December and it registers 85 lakh transactions daily. To put things in perspective, it is only 15 lakh short of the combined daily transactions through debit and credit cards.
And it is only getting bigger. It recently even launched a QR code system at places of worship for devotees to make donations.
A Paytm spokesperson was quoted as saying that the company is expanding its e-commerce business, Paytm Mall, and has 250 vacancies and will fill positions across the hierarchy.