One97 Communications India Ltd, the parent company of digital payments startup Paytm, on Friday reported more than a twofold rise in loss for the financial year ended March 2019 on account of higher expenses and lower revenue growth, according to documents sourced from business information platform Paper.vc.

In FY19, One97 Communications’ loss stood at 3,960 crore, compared with a loss of 1,491.23 crore reported a year ago.

The payments startup, however, was able to increase its revenue by a marginal 2% year-on-year (YoY) to 3,050 crore in FY19, compared with 2,987.41 crore a year ago.

Mounting losses for Paytm come at a time of intense competition in the digital payments sector and no clear source of revenue growth path to monetize its customer-base. Paytm is also locked in a market share war with rivals Google Pay and PhonePe. Once the clear market leader, Paytm has now fallen behind its two rivals on UPI transactions.

The Delhi-based startup also reported a 54% YoY jump in expenses in FY19— 7,254.80 crore compared with 4,718.50 crore in FY18. Most expenses were categorized under the other expenses category, which stood at 6,534.71 crore.

In FY19, the firm’s employee-related expenses went up by 16% to 627.78 crore despite reports by digital news publication Entrackr on Friday that the company has initiated lay-offs of around 500 employees. Entrackr reported that the lay-offs were expected to affect employees at mid and junior levels, across the KYC, offline-to-online, retail and transportation verticals.

Mint could not independently verify the reports of lay-offs.

A Paytm spokesperson said in an email reply to a Mint query, “Joining and leaving an organization is a part of the normal process. We have a well-structured system to assist our colleagues in their journey with Paytm. Performance is also evaluated from time to time based on which certain decisions may be taken."

News of layoffs come just days after the firm raised $1 billion from new and existing investors, including Japan’s SoftBank Group and China’s Ant Financial, on Monday. The fundraising lifted Paytm’s valuation to $16 billion, from $15 billion in August, when some of its employees cashed out their shares in a secondary sale to unnamed New York-based investors.

Paytm has also started offering an array of new services. Recently, it expanded its education business with a full bouquet of services across payments, commerce, financial and academic products.

The company also sells mutual funds online through its Paytm Money mobile app.

Paytm’s e-commerce unit, Paytm Mall, had trimmed its FY19 losses by 34% YoY to around 1,171.44 crore.

In the previous financial year, Paytm Mall reported losses of 1,787.73 crore.

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