“2020 was the year when we actually started to make money. We used to lose $40 million; now we are earning $14 million. Party ho rahi hai,” said Sharma, speaking at Times Network India Economic Conclave 2021 today.
In the last couple of years, Paytm has also ventured into mutual fund distribution, stock broking and selling digital gold among other things, widening its footprint in the Indian financial landscape. However, Sharma said the fintech industry may just be in a nascent stage and Paytm is just starting its journey.
“In the fintech journey, we are just gathering ingredients now and not even started cooking,” Sharma said, making an analogy with preparation of food. He believes that the fintech revolution in India is not fast food but gourmet meals. “We don’t even have an appetiser yet.”
Sanjiv Bikhchandani, founder of Info Edge, who is invested in startups like Zomato, Naukri.com, 99acres, Siksha.com, Happily Unmarried, Jeevansathi, etc, said conservatism of his portfolio companies paid off during the last year.
“We tell startups to conserve cash. Don’t build up cost structures which in the event of downturns, you cannot defend. Raise money if you are getting it. But spend it like it is the last round you will ever get,” Bikhchandani said, speaking at the same platform.
The quinquagenarian investor asserted that for startups, getting customer money first should be the focus, not getting funds from investors as investors will follow the customer.
“If you are getting customer’s money and getting it repetitively from the same customer at a price higher than your cost, then chances are you have a viable business as long as you get enough customers,” Bikhchandani said. “As long as you are getting customer’s money, investors’ money will definitely come because they love to invest in such companies. However, if you get investor’s money first, there is no guarantee that customers will come.”
Though, he agreed that in some businesses which are capital intensive, getting investment first could be the right way. Customers can follow later. He also said Indian companies should not sway its focus in chasing what Silicon Valley is doing.
“Silicon Valley is miles ahead. We should not be obsessed with catching up with them. We are way better than 20 years ago. We have some distance to go. Good news is India has 1.3 billion people, a large market,” said Bikhchandani.
Internet not democratic?
Sharma highlighted the monopoly of Google in Indian internet landscape and asserted that the web in the country has effectively become a commercial enterprise of one company.
As of February 2021, in India, over 96 per cent of mobile phones run on the Android operating system, developed by Google. The operating system comes with a bundle of Google apps that cannot be uninstalled. Although Android is open source, many services on Android can’t run without some of the Google proprietary software.
“India’s internet is effectively a commercial platform owned by one company thanks to the apps relying on one operating system. It’s fundamentally no more left as an open democracy as we assume it to be,” said Sharma. “(In the past) you could go on the internet, launch a company. Today you go on an app store and take ‘permission’ and hope that you are under a random set of rules that are implemented with a commercial bias.”
Sharma was referring to Google Play Store rules to be listed on the platform. Last year, Google received severe backlash from Indian developers for its 30 per cent fees and mandated use of Google’s billing system, a part of which the internet giant rolled back.
Play Store still does not allow listing of apps that reward customers. For example Dream11 or other ‘betting’ apps as they are against Google rules. This is despite the Supreme Court saying that these apps are legal in India.
“If this country has laws and rules, why are you not following them? Why are you creating a superseding law? Why are you not accepting the court of this country? I want India to govern app stores in India, not Apple and Google. I want India to govern the companies that operate in the country,” said Sharma.
Bikhchandani also said it will be better if India has 4-5 app stores competing in the country, then customers will have choices. “You need some constraints in monopolistic practices,” he said.