MUMBAI Paytm, the Alibaba-backed financial technology startup from India run by One97 Communications, has launched its bill-payment app in Canada as a first step in an ambitious global expansion plan.
"This is just the beginning," Paytm's blog said. "We'll soon expand our services by adding a full lineup of new use-cases that will make life easier for consumers. Canada has all the right ingredients -- a mature, smartphone-ready population, [and] an environment that greatly promotes innovation in the fintech space." Paytm also said it saw scope to "greatly" improve the bill-payment experience there.
Prime Minister Narendra Modi's controversial demonetization in November proved a boon for Paytm, which was adopted by numerous shopkeepers after cash in circulation ran short. The company already has over 200 million registered users on its platform, and more than 2.1 million online and offline merchants. The Paytm Labs development team comprising software, data, and machine-learning engineers now employs 55.
Paytm Canada was started in 2014 working out of local libraries in Toronto. Its objective is to facilitate payments for cellular, cable, and internet subscriptions as well as payments for electricity and other utilities. Users will also be able to pay insurance and property taxes using the app.
Vijay Shekhar Sharma, the founder and chief executive, told the Nikkei Asian Review that potential partners around the world are keen to introduce Paytm. Others overseas are already licensed to use the product under a different name.
"It is an obligation in a way," said Sharma. "But we don't want to [be] spread too thin -- we want to build a model and be sure of it by building it here. I want to be in the U.S., in Japan, why not?"
Paytm's Canada entry follows an investment boost from Alibaba Group Holding and venture fund SAIF Partners. Earlier this month, they pumped $200 million into Paytm E-Commerce. This was reported to be in exchange for stakes owned by Reliance Capital, which is run by Anil Ambani, and by Saama Capital, a Silicon Valley-based Indian fund. The two companies together had 4.3% of Paytm.
The Alibaba funding came through its Singapore arm, and is meant to help it compete with U.S.-based Amazon.com in India, and to promote new financing models.
Mayor John Tory of Toronto, left, with Paytm's founder and CEO Vijay Shekhar Sharma at an event in India to mark the Canadian launch of the payment app
Sharma's goal is to have 500 million Indians using Paytm by 2020. "We see that happening now at [an] accelerated pace," he said. "If it continues for a year, we will add another 150 million to 160 million customers, and some more -- and then we are sorted."
Paytm Payments Bank is also due for launch from the company's headquarters in Noida near New Delhi, the Indian capital. Sharma has personally invested 1.12 billion rupees ($16.51 million) in the venture.
Indian tech start-ups often progress in baby steps before expanding overseas. In 2012, Zomato, a restaurant discovery app, got going by acquiring small emerging companies. It went on to make a big splash by buying UrbanSpoon in the U.S., and is now present in 10,000 cities across 23 countries. Entertainment events app BookMyShow, a part of Network 18 Group, is present in four countries. Japan's SoftBank Group backed the global mobile advertising and discovery platform InMobi, which claims to reach 1.5 billion mobile devices worldwide.
Although growth in India's e-commerce industry has slowed of late, global payments company Worldpay predicted in December that the country will overtake the U.S. as the world's second-largest market after China by 2034. The e-commerce segment is expected to grow by 28% each year from 2016 to 2020.
