GENERAL MANAGEMENT PROJECT REPORT ON

“A REPORT ON STARTUP ECOSYSTEM IN INDIA WITH

REFERENCE TO PAYTM”

Submitted in Partial Fulfilment for the Award of the Degree of

Master of Management Studies (MMS)

(Under University of Mumbai)

BATCH 2019 - 21

SUBMITTED BY
SHRUTI SHRIDHAR VARUDE
ROLL NO: 191101

SPECIALISATION
FINANCE

UNDER THE GUIDANCE OF

PROF. SHAILENDRA PAWASKAR

PILLAI INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH,

NEW PANVEL - 410206

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 DECLARATION

I hereby declare that this Project Report titled“A Report on Startup Ecosystem in

India with reference to Paytm”Submitted by me to PILLAI INSTITUTE OF

MANAGEMENT STUDIES AND RESEARCH, NEW PANVEL – 410206
is a bonafide work undertaken by me and it is not submitted to any other University or
Institution for the award of any degree diploma or certificate or published any time before.

Name – Shruti Varude

Roll No.- 191101

Signature of the Student

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PILLAI INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH,
NEW PANVEL - 410206

CERTIFICATE

This is to certify that project titled “A Report on Startup Ecosystem in India with
reference to Paytm” Is successfully completed by Mr. / Ms. SHRUTI SHRIDHAR
VARUDE during the IV Semester, in partial fulfilment of the master’s degree in
Management Studies recognized by the University of Mumbai for the academic year 2019 –
21 through PILLAI INSTITUTE OF MANAGEMENT STUDIES AND
RESEARCH, NEW PANVEL – 410206. This project work is original and not
submitted earlier for the award of any degree / diploma or associateship of any other
University / Institution.

Name of Guide: Prof. Shailendra Pawaskar

 

(Signature of the
Date: ______________________ Guide)

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 ACKNOWLEDGEMENT

I sincerely thank Prof. Shailendra Pawaskar for the guidance and encouragement
in carrying out this project work. I also thank the Director of Pillai Institute of
Management Studies & Research, Dr. R. Chandran for providing me the
opportunity to embark on this project.

EXECUTIVE SUMMARY

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In recent years, startups have been receiving increased attention in many parts of the world.
In India, the number of startups has increased fast and more support has become available in
all dimensions. Startups, in India as in many other parts of the world, have received increased
attention in recent years. Their numbers are on the rise and they are now being widely
recognised as important engines for growth and jobs generation. Through innovation and
scalable technology, startups can generate impactful solutions, and thereby act as vehicles for
socio-economic development and transformation.

The aim of this study is to understand about the startups in India, the growth drivers as well
as the challenges faced by Indian startups. Further, the study investigates how the startup
ecosystem has developed over the years and describes where and which kind of support is
available. While the primary focus is on Paytm and its business models.

This report analyses the current state of the Indian startup ecosystem. The study helps in clear
understanding of how a startup works, its business model and various valuation methods used
for valuation and funding.

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 CONTENT
SR.NO TABLE OF CONTENT PAGE
NO.
CHAPTER I: INTRODUCTION OF THE
PROJECT
1.1 Introduction
1.4 Aim of the Study
1.6 Objective of Study
1.7 Scope of the Study
1.8 Limitations of the Study

CHAPTER II: REVIEW OF LITERATURE

2.1 Background
2.2 Theories Referred

CHAPTER III: RESEARCH

METHODOLOGY
3.1 Research Design
3.1.1 Research Method
3.1.2 Data Collection Methods

CHAPTER IV: INDUSTRY ANALYSIS

4.1 Introduction
4.1.1 Valuation methods/models
4.1.2 Funding options to raise startup capital
4.2 Pestle Analysis
4.3 Porter’s Five Force Model

CHAPTER V: COMPANY PROFILE AND

COMPANY ANALYSIS
5.1 Introduction to Paytm
5.2 SWOT analysis
5.3 BCG Matrix
5.4 Mckinsey 7s FRAMEWORK

CHAPTER VI: MANAGEMENT

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 CONCEPTS
6.1 Introduction To The Business Model Of Paytm
6.2 Cost Structure Of Paytm Business Model 
6.3 Unique Marketing Strategies

CHAPTER VII: CONCLUSION

CHAPTER VIII : BIBLIOGRAPHY /
REFERENCES

CHAPTER I: INTRODUCTION

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 1.1 INTRODUCTION
Startups play an essential role, especially during these stressful times. They provide the best
potential for job growth and serve as an anchor by increasing demand while bringing in
innovation and competition. As the economy’s backbone, they need to get the necessary
support from the government in terms of favourable policies and from investors in the form
of capital. Covid-19 has left the entire services sector immobilised accompanied by
skyrocketing unemployment rates. Seeing the volatility within the current business
atmosphere, a significant reduction in Indian PE/VC investment and exit activity in 2020 is
predicted. Due to lockdowns and the anticipated changes in consumer lifestyles, some of
these new-age corporations are under severe pressure. Layoffs, furloughs and salary cuts are
the new normal for most startups as they struggle to re-emerge from this devastating Covid-
19 obligatory pause.

A study conducted by NASSCOM in 2020 revealed that nearly 70% of Indian startups have
the cash to survive for only three months and nearly 40% of the startups surveyed mentioned
that they are either in the process of temporarily halting or closing down their operations.
With the dearth of capital, lack of clarity on revenue projections and supply chain revival
PE/VC funds are restructuring and evaluating existing deals. Traditional PE/VC investments
are expected to slow down over the next quarter while several niche segments like
productivity solutions, logistics and delivery, edtech, online entertainment remain attractive
to investors due to their applicability in the current environment.

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The digital transactions in sectors such as travel and F&B saw a decline during the first 100
days of the movement restrictions, as demand for these services was hit hard. The
government also undertook major steps to shield the economy by introducing various
initiatives, relaxations and a financial package to strengthen the startup ecosystem. Though
the amount of financial stimulus is being debated, the government’s intention is to ensure
startups don’t just survive in the short term but rather become self-sufficient in the long term
under the “Atmanirbhar” plan.

In the past few months, the government has given statutory support and created a basis for the
practice of telemedicine in India. Changes were announced for labor laws, the Agricultural
Produce Market Committee (AMPC) Act, the Foreign Exchange Management Act (FEMA)
and company laws; and loan moratoriums and collateral-free loans to MSMEs. All of this
will benefit the Indian startup ecosystem in the post-Covid era.

1.2 AIM OF THE STUDY

The aim of the study is to understand and study about the Consumer Internet Startup
Ecosystem in India with reference to a particular company which is paytm. Also to
understand the business model of paytm and understand various valuation and funding
options available in India.

1.3 OBJECTIVES OF THE STUDY

The study has been undertaken in order to achieve the following objectives:

● To study an in-depth understanding the startup ecosystem in India with

reference to Paytm
● To study various methods of valuation and funding options.
● To study the business model of Paytm.

1.4 Limitations of the Study

Dynamic environment: In the current environment, future changes are largely
unpredictable; more so when the economic and business environment is buffeted by
frequent winds of change. In an environment characterised by discontinuities, the past
record proves to be a poor guide to future performance.

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 CHAPTER II: REVIEW OF LITERATURE

2.1 BACKGROUND

It’s a matter of great pride that India is ranked 68th out of 137 countries as per the Global
Entrepreneurship Development Institute, This appears nothing but moderate, if we consider
the performance. However, looking at the performance by specific criteria, deeper insights
about the phenomena are derived. Its strength areas, where its performance is above its
overall score, are in product and process innovation, internationalization, opportunity start-
up, risk acceptance, opportunity perception and robust competition in the marketplace.

Its performance on human capital is broadly at par with its overall performance. In broader
terms, India’s USP lies in its ability to identify the opportunities and risk-taking, which in
turn links to its capabilities in product innovation and a healthy attitude towards globalization

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thus, seeking new markets beyond the home base. India has proven its mettle for
entrepreneurship and exhorted us to grow exponentially in innovation. India, in global
context has increasingly pioneered in “frugal innovation” in which products meet acceptable
performance standards and features which are often aimed at the bottom of the pyramid of
consumers and associated with an extremely low cost for the consumers. However, experts
also point towards the concerns about India’s investing in technology, technological
partnerships, the need to stay abreast of current trends, greater labour market flexibility and a
more supportive education and training system. Amidst these strengths and weaknesses, it is
encouraging to note that India has managed to be second -largest hub of startups in terms of
numbers of existing startups

2.2 LITERATURE REVIEW

1 As per the Start up Outlook report 2019 (Feb), two factors make India appealing as a
start up Nation-
● First, is the cost of doing business which is low because of proximity between
customers and vendors
● Second is the mammoth size of the domestic market along with a huge base of
internet users.

Interestingly, India is also the second largest consumer internet market in the world
(overtaking China) with around 500 million internet users. Obviously, it has never
been as easy and cheap as today to launch digital products or services in India,
courtesy, the economics of digital innovation.

2 Maharashtra and the exciting growth of its startup ecosystem February 2019
KPMG.com/in

3 Start-up ecosystem in india: a study with focus onentrepreneurship and university

business incubators.
On one side India is growing to be one of the world's biggest markets after China. The
incomes and consumption of not just the thriving middle class but even the rural
economy is rapidly growing. On the other hand India has a lot of really big problems
to be solved-be it in education, infrastructure, agriculture, logistics, retail, healthcare

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 etc. This combination is the most fertile ground for startups. The big businesses are
comfortable making money off the shortcomings rather than solving them or changing
their existing established business models. It's the startups that will come up with
innovative disruptive business models to solve the challenges India faces. And this is
the biggest impact startups will have on the Indian economy. But entrepreneurship is
not an easy path and the more you grow the more challenges you face. From
awareness and sustainability of businesses to regulations associated with legality and
enforceability, the list of challenges is long. Given these challenges, it can be hard to
get started on your entrepreneurial journey without guidance and assistance. So how
does one move forward and get ahead? Where do entrepreneurs get their dose of skill
and know-how supplements to turn their startup ideas into reality? Incubators have an
answer to the problem. The present paper develops an in-depth understanding of the
startup ecosystem in India. This paper discusses the role of Incubators in producing
and nurturing successful business ventures. It also studies the government's policy
measures in fostering entrepreneurship culture and setting up university business
incubators. At last the paper discusses the availability of grants to academic
institutions for establishing the incubators in their premises.
(Deepak Kumar Adhana Research Scholar, Institute of Mgt. Studies & Research
(IMSAR), M.D. University, Rohtak. Alisha Kumar Assistant Professor, School of
Commerce & Management Lingaya’s Vidyapeeth, Faridabad)

4 India the world’s fastest growing startup ecosystem: A Study the Indian startup
ecosystem has really taken off and come into its own driven by factors such as
massive funding, consolidation activities, evolving technology and a burgeoning
domestic market. The numbers are telling from 3,100 startups in 2014 to a projection
of more than 11,500 by 2020, this is certainly not a passing trend. It’s a revolution.
And it’s going to change the way the markets are working today in India.The
strategies of the Central Government takes into account the collective aspirations and
enterprise of the risk taking Indian. The success of the Silicon Valley startups has
many indomitable and resolute Indians in the heart of it. India aspires to contribute to
15-20 percent global GDP. It happens when the Startup movement attains critical
mass. Startup India looks beyond the argument that it is a better packaging of existing
institutional support. The complexities of managing the diversity of thoughts,
processes and people of India are very well known. The plan of Startup Indians is to

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 flourish under an ocean of changes in mindset and thinking. It is giving feather to
wings of the unstoppable Indian. The world is struggling to avoid another meltdown.
Startup India is all about challenging conventions and spurs a revolution of unique
and emphatic business models developed by new . It is the precursor to India taking
Centre stage in the new world order. The study concluded that making capital more
accessible and cheaper, easier patent filing, giving research and development credits,
and easier entry for the success of Startup India as a growing economy.

Dr Suniti Chandiok Associate Professor, BCIPS, Dwarka

(Amity Research Journal of Tourism, Aviation and Hospitality Vol. 01, issue 02, July-
Dec 2016)

5 A STUDY ON PAYTM’S GROWTH IN INDIA AS A DIGITAL PAYMENT

PLATFORM:Two words that come to almost every Indian’s mind while Shopping,
Post demonetization, are “Paytm karo.” Paytm has brought a paradigm shift in the
retail industry by completely transforming the payment methodology. Initially, this
online wallet cum e-commerce website was used to make payments for limited
utilities like mobile and DTH recharge and shopping bills. Over the years, this portal
has expanded its scope and has brought about anything and everything under the
ambit of its operations. Customers now can recharge their metro card, pay bills for
utilities like electricity and water, transfer funds to other bank accounts, book
flight/train/bus tickets, make hotel reservations, etc. Now the latest Paytm Succes
Story is ever expanding with the addition of e-retail and m-commerce stores. This
gives the option to small vendors to list their products on the website and allows them
to expand their customer base.

(Mrs.Dhanalakshmi Komirishetty,M.B.A. Asst.Professor Department of MBA

Mallareddy College of Engineering,hyd,India.Mr. B. Sarath Simha, M.B.A. Research
Scholar Department of Commerce and Business Administration Acharya Nagarjuna
University Ongole Campus, Ongole.)

6 A STUDY ON USAGE OF PAYTM:Smartphones have become an essential part of

daily life. Due to technology, Digital wallets are quickly becoming the mainstream
mode of online payment and mobile users can nowadays use their smartphones to
make money transactions or payment by using applications installed in the phone.
One such application is PayTm. The present study tries to study the usage of PayTm

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 by Smartphone users. Apart from this, the study also attempts to find out the various
problems faced by PayTm users.

(ABHIJIT M. TADSE Institute of Management Development and Research, Pune

(MS) INDIA. HARMEET SINGH NANNADE Institute of Management
Development and Research, Pune (MS) INDIA.)

7 The state of Indian Startup Ecosystem Report 2020:From having a handful of tech
companies to dozens and now thousands of innovative new ventures, India’s startup
ecosystem grew immensely in the past decade. From 29K startups in 2014, the
number has grown exponentially from 2015-2018 and will touch 55K startups by the
end of 2020. With overall funding skyrocketing to touch $63 Bn between 2014 to H1
2020 alone, India has seen entry of 33 startups in the unicorn club having a combined
valuation of $114 Bn. After steady growth in 2018 and 2019, in 2020 too, the Indian
startup ecosystem was expected to remain stable in terms of funding and investor
interest, but the pandemic has changed the game completely. With the funding winter
coming in early, there’s a bigger focus on sustainability, which is also expected to
play a part in the number of funding deals. Nevertheless, there are several positives
still in the Indian market to give us hope about the future of startups. Growing from a
nascent stage to a flourishing ecosystem to the current stage of maturity and stability,
Indian startups have some of the best market conditions to take advantage of with
digital products and services adoption at an all-time high. Once the medium and long-
term pandemic impact subsides, there’s no stopping Indian startups. This report will
act as a go-to-guide for just about everything one may want to understand about the
Indian startup ecosystem. With deep, data-driven insights to influence strategic
decision-making in governance, investments, growth, and other core aspects driving
the Indian startup ecosystem.

(The DataLabs by Inc42 Plus)

8 Sustainable Business Models: A Review :During the past two decades of e-commerce
growth, the concept of a business model has become increasingly popular. More
recently, the research on this realm has grown rapidly, with diverse research activity
covering a wide range of application areas. Considering the sustainable development

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 goals, the innovative business models have brought a competitive advantage to
improve the sustainability performance of organizations. The concept of the
sustainable business model describes the rationale of how an organization creates,
delivers, and captures value, in economic, social, cultural, or other contexts, in a
sustainable way. The process of sustainable business model construction forms an
innovative part of a business strategy. Different industries and businesses have
utilized sustainable business models’ concept to satisfy their economic,
environmental, and social goals simultaneously. However, the success, popularity,
and progress of sustainable business models in different application domains are not
clear. To explore this issue, this research provides a comprehensive review of
sustainable business models literature in various application areas. Notable
sustainable business models are identified and further classified in fourteen unique
categories, and in every category, the progress -either failure or success- has been
reviewed, and the research gaps are discussed. Taxonomy of the applications includes
innovation, management and marketing, entrepreneurship, energy, fashion,
healthcare, agri-food, supply chain management, circular economy, developing
countries, engineering, construction and real estate, mobility and transportation, and
hospitality. The key contribution of this study is that it provides an insight into the
state of the art of sustainable business models in various application areas and future
research directions. This paper concludes that popularity and the success rate of
sustainable business models in all application domains have been increased along
with the increasing use of advanced technologies

(Saeed Nosratabadi , Amir Mosavi , Shahaboddin Shamshirband , Edmundas

Kazimieras Zavadskas , Andry Rakotonirainy and Kwok Wing Chau )

9 Start-Up Report - Momentous Rise Of The Indian Start-Up Ecosystem:ndia is fast

emerging as a start-up nation. The Indian technology landscape has seen a tremendous
growth towards creation of innovative startups and has emerged as the 3rd fastest
growing hub for technology startups in the country,The report analyses the current
scenario and emerging trends across the various dimensions that define the Indian
start-up ecosystem, and gauge India’s position as a global start-up hub that is
becoming attractive for investors, start-ups, & corporates. The report also details the
current landscape, its growth factors, top trends, funding scenario, and key policies.

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 Also, provides analysis on key industry verticals, incubators/accelerators, and the
talent scenario.

(Start-up Report -NASSCOM)

10 “Mobile Wallet: An upcoming mode of business transactions” : Explained about

mobile wallet, types and trends. Then discussed the Role of mobile wallet in various
sectors like Banks, Retail and Hospitality. The paper explains the importance of
mobile wallet for Banks, Customers and Companies. In future scope it talks of mobile
wallets becoming a latest marketing channel in near future. And contribute highly in a
seamless shopping experience for the customers that increase their tendency for
frequent and more repurchases with delightful experiences. To conclude they speak of
the importance and growth of mobile money in business, social and economic
perspective. The presence of mobile wallets spreading from urban to rural areas on a
large scale. Hence, wallet money sees a high bright future in near time.

(Dr. Poonam Painuly, Shalu Rathi (May 2016) )

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CHAPTER III: RESEARCH METHODOLOGY

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 3.1 RESEARCH DESIGN
Research design is the conceptual structure within which research is conducted. It constitutes
the blueprint for collection, measurement and analysis of data for a descriptive research.
Descriptive research involves collecting numerical through self-reports collected, through
questionnaires or interviews (person or phone), or through observation. For present study, the
research is descriptive and conclusion oriented.

3.1.1 Research Method

This study has been carried out with the help of secondary data only,
all the data has been collected from the various sources such as
websites & reports and compiled as said by the need of the study.

3.1.1 Data Collection Methods

The study is based on the published data. For the purpose of present
study, the data was extracted from the various newspapers, journals,
articles and websites particularly from Startup Outlook report 2019,
and Global Innovation Index 2019 Report has also been analysed.

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CHAPTER IV: INDUSTRY ANALYSIS

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4.1 INTRODUCTION

Startup Ecosystem

Start-up ecosystem consists of many people who make it successful. However, in order to be
successful, start-ups need help from other players.

Startup ecosystem consists of people, various types of start-ups, mentors, advisors, incubators
and accelerators.

Start-Up Culture in India

The world of startups in India has seen many changes in these past few years. Once an
industry yearning to be taken seriously, startups have now become primary engines for
growth and job generation in India. Following the opening-up of Indian markets for foreign
investors, the Indian market grew dynamically in the past two decades.

The market matured over the past decade while the country-bred a generation of ambitious
young employees who were more than willing to take risks to get where they wanted to be.
The government also became more and more supportive of the startup sector. This translated
into more opportunities and avenues for startups to grow, along with better financial aid for
the budding companies. The trust shown by the government also led to an increase in
investments as investors felt much more comfortable investing in a government-backed field.

India has the 3rd largest startup ecosystem in the world, with an annual growth rate of 15%.
The startup industry alone was able to generate around 40,000 jobs.

Reasons for Startup growth in India

The startup growth in India was something that was gradual in nature, and there are quite a
few reasons why India became such a sustainable environment for startups to thrive in. Some
of the major reasons are:

The pool of Talent - Our country has a pool of talent. India has a population that has a
majority of the younger generation. This shows the amount of potential that our country has
in terms of talent. There are millions of students graduating from colleges and b-schools
every day. Many of these students use their knowledge and skills to begin their own ventures,

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and that has contributed to the startup growth in India. In the past, much of this talent was
attracted to only the big companies, but now that is slowly changing. 

The cost of setting up businesses is low - India is a labor-intensive country rather than being
capital intensive. Also, the labour here can be hired at very cheap rates. So, compared to
some other countries, the cost of setting up a business here is comparatively low. In fact, this
is the reason why many multinational corporations as well, decide to set up their plants and
offices in India. This is one factor that was really capitalised by the startup owners as well.

Government Boost - This past decade has seen a massive startup growth in India and one of
the reasons for this could be attributed to the various schemes launched by the Government.
Some of the major schemes that were introduced to boost entrepreneurship were StartUp
India and StandUp India. The Government also tries to encourage ventures in new sectors or
in certain rural areas by providing subsidies to them. 

Increasing use of the Internet - India has the world’s second-highest population, and after the
introduction of affordable telecom services like Reliance Jio, the usage of internet has really
increased. It has even penetrated to the rural areas now. India has the second-largest internet
user base after China, and companies and startups can really leverage on this easy access to
the internet. Not only can it be used to spread the message about a new business, but it can
also be used to gather new information as well. So, communication has become much easier.
This is also one of the major reasons for the startup growth in India. 

The advent of Technology - The evolution of startups in India has also been due to the advent
of technology. This has led to businesses growing by leaps and bounds. Technology has made
the various processes of business very quick, simple and efficient. There have been major
developments in software and hardware systems due to which data storage and recording has
become a very easy task. Now because of the trend around artificial intelligence and black-
chain, many new startups are considering these options as well.

Variety of funding options available - There are numerous options and opportunities
available. Startup owners can approach angel investors, venture capitalists, seed funding, etc.
This availability of options and easy accessibility has also contributed to the growth of the
startup ecosystem in India.

Current Scenario of Start-Ups

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The National Association of Software and Services Companies (NASSCOM) reports that
India is now the third largest start-up hub in the world, with more than 3000 new companies.
The number of start-ups in India is expected to nearly rise from 3,100 in 2014 to over 11,500
by 2020. If growth remains in the same manner, then the unemployment issue will reduce to a
certain extent as it will generate 2.5 Lakh jobs in the coming 5 years.

What is startup valuation?

Startup valuation is the process of calculating the value of a startup company. Startup
valuation methods are particularly important because they are typically applied to startup
companies that are currently at a pre-revenue stage.

Business owners will hope for a high valuation, whereas pre-revenue investors would prefer a
lower value that promises a bigger return on investment (ROI).

Assigning a valuation to a startup company with no revenue can be a challenge.

Since most startup valuation methods don’t have details on profit, taxes, and amortization,
one has to consider other key factors in the process.

4.1.1 Valuation methods/models

● Market Capitalization: We get the market capitalization of any firm by multiplying
the price of its current share with the total number of outstanding shares. It is the
easiest and simplest method used to do the valuation of the start-up.

● Earning Multiplier: Price to earnings ratio (P/E) is another common name of earning
multiplier, the more accurate method to find out the actual value of any organisation
when compared with the market capitalization method.

● Asset Valuation: The value of the business is determined by deducting all the debts,
liabilities from the market value of all the assets that a business holds. This method
takes place when the company is unable to make any kind of profit

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● Berkus Valuation Method: In this method a financial number is given to all the major
elements risk faced by the organisation to reduce production, execution, technology,
and market risk.

● Scorecard Valuation Method: More risk factors are included in the scorecard
valuation method when compared to the previous valuation method.

● Risk Factor Summation Method: It is the combination of the Berkus Valuation

Method and Scorecard Valuation Method, while determining this method 12 risk
factors are taken into consideration.

4.1.2 Funding options to raise startup capital

● Bootstrapping your startup business:

Self-funding, also known as bootstrapping, is an effective way of startup financing,

especially when you are just starting your business. First-time entrepreneurs often have
trouble getting funding without first showing some traction and a plan for potential
success. You can invest from your own savings or can get your family and friends to
contribute. This will be easy to raise due to less formalities/compliances, plus less costs of
raising.

Self-funding or bootstrapping should be considered as a first funding option because of its

advantages. When you have your own money, you are tied to business. On a later stage,
investors consider this as a good point. But this is suitable only if the initial requirement
is small.

● Crowdfunding:

Crowdfunding is one of the newer ways of funding a startup that has been gaining lot of
popularity lately. Crowdfunding is a method of raising capital through the collective
effort of friends, family, customers, and individual investors. This approach taps into the
collective efforts of a large pool of individuals — primarily online via social media and
crowdfunding platforms — and leverages their networks for greater reach and
exposure.Some of the popular crowdfunding sites in India are Indiegogo, Wishberry,
Ketto, Fundlined and Catapooolt.

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● Angel Investment:

Angel investors are individuals with surplus cash and a keen interest to invest in
upcoming startups. They also work in groups of networks to collectively screen the
proposals before investing. They can also offer mentoring or advice alongside capital.
This alternative form of investing generally occurs in a company’s early stages of growth,
with investors expecting up to 30% equity. They prefer to take more risks in investment
for higher returns.

Angel Investment as a funding option has its shortcomings too. Angel investors invest
lesser amounts than venture capitalists.

● Venture Capital:

Venture capitals are professionally managed funds who invest in companies that have
huge potential. They usually invest in a business against equity and exit when there is an
IPO or an acquisition. VCs provide expertise, mentorship and acts as a litmus test of
where the organisation is going, evaluating the business from the sustainability and
scalability point of view. A venture capital investment may be appropriate for small
businesses that are beyond the startup phase and already generating revenues. Fast-growth
companies like Flipkart, Uber, etc with an exit strategy already in place can gain up to
tens of millions of dollars that can be used to invest, network and grow their company
quickly.

Some of the well known Venture Capitalists in India are – Nexus Venture Partners,
Helion Ventures, Kalaari Capital, Accel Partners, Blume Ventures, Canaan, Sequoia
Capital and Bessemer Ventures.

● Business Incubators & Accelerators:

Early stage businesses can consider Incubator and Accelerator programs as a funding
option. An incubator helps/assists/nurtures a business to walk, while accelerator helps to
run/take a giant leap.

These programs normally run for 4-8 months and require time commitment from the
business owners. You will also be able to make good connections with mentors, investors
and other fellow startups using this platform.

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In India, popular names are Amity Innovation Incubator, AngelPrime, CIIE, IAN
Business Incubator, Villgro, Startup Village and TLabs.

● Raise Funds by Winning Contests:

An increase in the number of contests has tremendously helped to maximize the

opportunities for fundraising. It encourages entrepreneurs with business ideas to set up
their own businesses. In such competitions, you either have to build a product or prepare
a business plan.

Some of the popular startups contests in India are NASSCOM’s 10000 startups,
Microsoft BizSparks, Conquest, NextBigIdea Contest, and Lets Ignite.

● Raise Money Through Bank Loans:

The bank provides two kinds of financing for businesses. One is working capital loan, and
other is funding. Working Capital loan is the loan required to run one complete cycle of
revenue generating operations. Funding from the bank would involve the usual process of
sharing the business plan and the valuation details, along with the project report, based on
which the loan is sanctioned.

Almost every bank in India offers SME finance through various programs. For instance,
leading Indian banks – Bank Of Baroda, HDFC, ICICI and Axis banks have more than 7-
8 different options to offer collateral free business loans.

● Get Business Loans From Microfinance Providers or NBFCs

It is increasingly becoming popular for those whose requirements are limited and credit
ratings not favoured by bank.

● Govt Programs That Offer Startup Capital:

The Government of India has allocated 1500cr to boost/promote digital modes of

payment in Union budget 2021 to improve startup ecosystem in India. In order to boost
innovative product companies, Government has launched ‘Bank Of Ideas and
Innovations’ program.

Government backed ‘Pradhan Mantri Micro Units Development and Refinance

Agency Limited (MUDRA)‘ starts with an initial corpus of Rs. 20,000 crore to extend
benefits to around 10 lakhs SMEs. You are supposed to submit your business  plan and

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 once approved, the loan gets sanctioned. You get a MUDRA Card, which is like a credit
card, which you can use to purchase raw materials, other expenses etc. Shishu, Kishor and
Tarun are three categories of loans available under the promising scheme. Learn more
about MUDRA.

Also, different states have come up different programs like Kerala State Self Entrepreneur
Development Mission (KSSEDM), Maharashtra Centre for Entrepreneurship
Development, Rajasthan Startup Fest, etc to encourage small businesses.

4.2 PESTLE ANALYSIS

Political

⮚ Startups are seeking immediate government support in the form of favourable

policies, easing regulations, partnership opportunities, and reimbursements on
immediate fixed costs
⮚ Internet-based ecommerce startups need more regulatory and policy support than
economic packages to ease compliance burdens and onerous tax obligations.

Economical

⮚ “Impact of COVID-19 on Indian Start-ups'' conducted by Ficci jointly with the

Indian Angel Network depicts that only 22 percent of the start-ups have cash reserves
to meet fixed cost expenses of their companies over the next 3-6 months.

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 ⮚ 70 percent of start-ups stated that their businesses have been impacted by COVID-19.
12 per cent of the start-ups have shut operations and 60 per cent are operating with
disruptions
⮚ 43 percent of start-ups have already started salary cuts in the range of 20-40 per cent
over the period of April-June 2020
⮚ 33 percent start-ups said investors have put investment decisions on hold and 10 per
cent stated that deals have been called off.
⮚ Only 8 percent start-ups received funds as per deals signed pre-Covid, (Ficci)

Social

⮚ There are now 574 million active internet users in India, a growth rate of 24 per cent
from 2019. It says India's active number of monthly internet users will reach 639
million by the end of this year, with the coronavirus-induced lockdown a factor in this
increase.
⮚ Request for new home broadband connections has increased by 40 per cent in metros
during the pandemic.

Technological

⮚ Google has unveiled plans to invest $10bn in India over the next few years for
digitisation efforts for small businesses as well as low-cost internet solutions and
artificial intelligence for sectors such as agriculture, education and healthcare.
⮚ Digital India initiative – one of the government's flagship campaigns – has brought
more government services online and developed the digital infrastructure, as the
country looks to further boost access to the internet.

Legal

⮚ India needs to implement a data protection and privacy regime.

⮚ The country has a draft data privacy bill that is yet to move through the legislative
process.

Environmental

⮚ Going green can help cultivate a better brand image, gain more customers, and save
money.

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 ⮚ Committing to becoming environmentally friendly shows your customers you are here
to make an impact as well as profit
⮚ Going paperless, recycling, avoiding plastic and minimising energy consumption can
lead to Ecostartup

4.3 PORTER’S FIVE FORCE MODEL

THREATS OF NEW ENTRANT:

The threat of new entrants refers to the barriers of entry into the industry and whether they
are strong enough to prevent a lot of new companies from jumping in to compete or whether
they are particularly weak and the market could easily be flooded with a bunch of new
competitors.

POWER OF SUPPLIER:

The bargaining power of suppliers refers to how much power to negotiate price and other
terms your suppliers have. If you’re a small company and building a product with rare inputs
that are only sold by a handful of companies, your suppliers probably have a lot of bargaining
power because if you don’t buy from them you won’t be able to get what you need elsewhere.
On the other hand, if you’re a massive company and purchasing commodity products that are
easy to get from a number of different suppliers, then the bargaining power of suppliers is
severely limited because if you don’t like their terms you can just go elsewhere. Walmart’s
suppliers have very limited bargaining power whereas the suppliers for a top chef who needs
a very specific and rare ingredient, such as a particular truffle, have quite a bit.

POWER OF BUYER:

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The bargaining power of buyers refers to essentially the same thing as the bargaining power
of suppliers, but as it applies to your customers. Do you make a rare product that they can’t
get from anyone else or do you sell a commodity that they could easily find elsewhere? The
more difficult it is to get the same product or service elsewhere, the less bargaining power
your buyers have. On the other hand, if you sell a commodity, like office supplies, the buyer
has a ton of bargaining power because if you don’t give him/her the deal s/he wants s/he can
just go somewhere else and get the exact same product.

AVAILABILITY OF SUBSTITUTES:

The threat of substitute products refers to the ability of a customer to decide to use a different
product instead of yours to solve the same problem or meet the same need. This doesn’t mean
that the customer chooses the store brand deli meat over the Boar’s Head – that’s just
competition within the same product. It means that the customer decides not to buy the deli
meat at all and instead purchases spam. The threat of substitute products is often overlooked
by new entrepreneurs who will come in and say they have a brand new product with no
competition whatsoever. However, substitute products should be viewed as a type of indirect
competition. The first microwave competed with the conventional oven even though it was a
brand new product because the conventional oven was a substitute product.

COMPETITIVE RIVALRY:

Competitive Rivalry refers to the other players in your market with whom you compete

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32 | Page
CHAPTER V: COMPANY ANALYSIS

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5.1 INTRODUCTION

Paytm is an Indian e-commerce payment system and financial technology company, based in
Noida, Uttar Pradesh, India. Paytm is currently available in 11 Indian languages and offers
online use-cases like mobile recharges, utility bill payments, travel, movies, and events
bookings as well as in-store payments at grocery stores, fruits and vegetable shops,
restaurants, parking, tolls, pharmacies and educational institutions with the Paytm QR
code.As of January 2018, Paytm is valued at $10 billion.

As per the company, over 7 million merchants across India use their QR code payment
system to accept payments directly into their bank account.The company also uses
advertisements and paid promotional content to generate revenues.

HISTORY

Paytm was founded in August 2010 with an initial investment of $2 million by its founder
Vijay Shekhar Sharma in Noida, a region adjacent to India's capital New Delhi.

❖ It started off as a prepaid mobile and DTH recharge platform, and later added data
card, postpaid mobile and landline bill payments in 2013.
❖ By January 2014, the company had launched the Paytm Wallet, which the Indian
Railways and Uber added as a payment option. It launched into e-commerce with
online deals and bus ticketing. In 2015, it unveiled more use-cases like education fees,
metro recharges, electricity, gas, and water bill payments. It also started powering the
payment gateway for Indian Railways.
❖ In 2016, Paytm launched movies, events and amusement parks ticketing as well as
flight ticket bookings and Paytm QR. Later that year, it launched rail bookings and
gift cards.
❖ In 2017, Paytm became India's first payment app to cross over 100 million app
downloads. The same year, it launched Paytm Gold, a product that allowed users to

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 buy as little as ₹1 of pure gold online. It also launched Paytm Payments Bank and
‘Inbox’, a messaging platform with in-chat payments among other products.
❖ By 2018, it started allowing merchants to accept Paytm, UPI and card payments
directly into their bank accounts at 0% charge.It also launched the ‘Paytm for
Business’ app which is now called Business with Paytm App, allowing merchants to
track their payments and day-to-day settlements instantly.This led its merchant base to
grow to more than 7 million by March 2018. The company launched two new wealth
management products - Paytm Gold Savings Plan and Gold Gifting to simplify long-
term savings.
In January 2018, Paytm entered into a joint venture with Alibaba Group-owned
gaming company AGTech Holdings to launch Gamepind, a mobile gaming platform.
Gamepind was later rebranded as Paytm First Games in June 2019.
In March 2018, Paytm Money was set up with an investment of ₹9 crore to bring
investment and wealth management products for Indians.
❖ In March 2019, Paytm launched a subscription based loyalty program called Paytm
First.
In May 2019, Paytm partnered with Citibank to launch Paytm First credit card.
❖ In July 2020, Tata Starbucks partnered with Paytm allowing its customers to order
food online during a coronavirus (COVID-19) pandemic

Shareholding

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VISION

“A company is worth the company it keeps.” – Vijay Shekhar Sharma

We are on the road to making an enormous impact to the economic foundation

of the country. We want millions to accompany us and benefit from this
journey.
We want to make a positive difference by empowering the lives that we touch.

5.2 SWOT ANALYSIS

STRENGTHS

1. Paytm has got extremely high brand awareness across India

2. Paytm was able to scale up its business quickly after demonetization
3. Offers multiple cashback options to customers
4. Paytm is largely accepted by merchants across India, which has helped the brand
grow
5. Strong marketing campaigns have helped spread brand awareness
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 6. Word of mouth of cashless transactions and ease of use has been accepted well by the
people
7. Strong investments from Ratan Tata, Alibaba group etc have strengthened Paytm's
position

WEAKNESS

1. Audience in India is less savvy as the majority consider cash as the primary currency.
2. Paytm has diversified too much.

OPPORTUNITIES

1. Paytm can cater to a larger audience with some offline presence as well
2. Paytm can educated customers on accepting cashless transactions and online
payments which would in turn boost their customer base
3. Offer more banking services along with online payment options

THREATS

1. Banks offering e-wallets on their saving accounts

2. Security and privacy of user is a concern for Paytm

5.3 ANSOFF MATRIX

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 1. Market Penetration

Market Penetration is an important growth strategy which deals with existing product of the
company in the existing market. The company can use this strategy to increase its current
product sales in the market it is operating. There are many ways of growing the business with
this segment. Paytm is intensely using its E-retailing services to grow its business. Paytm is
an online retailing and payment service company provides mobile recharge, electricity bill,
gas bill, financial services, electronics etc. Its recharge portal is considered as one with which
it penetrated the market. Paytm recharge portals in India are efficient systems and many
consumers prefer it over other methods. However, Paytm can use it for geographical
expansion in different regions of India. The company can also take advantage of contracts
and partnership of other agents to grow. It can also increase its presence in more retail outlets.
The company can allow consumers to have the recharge portal facility from different retail
stores too.

2. Product Development

Product development is considered a second intensive growth strategy. This means the
company has to introduce a new product for the current market to increase the consumer base
and sales. Paytm uses this strategy for achieving the growth objectives. The company can
also modify the existing product and introduce it to new customers. Paytm introduced IRTC-

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Ticker Reservation, hotel bookings, events and movies bookings, automobiles, and flight
bookings as a product development strategy. The company attracted its current customers to
use new services provided by Paytm. It will make it easier for the customers to make
bookings from a reliable source. Paytm invested more in the R&D to analyse which services
will benefit its customers and the company in the long run. Paytm used strategic marketing
and different product development techniques to increase awareness among consumers about
the new launched services.

3. Market Development

Market Development in Ansoff matrix deals with existing products of the company
introduced in new markets. The company finds new markets to introduce the products of the
company in order to attract new customers. Paytm introduced some of its services in new
markets like, Payment Gateway, Ex-Grofers, Domino’s payment and its web page. The
company provided the services to different areas of India and increase the markets to provide
its services across country. This can be done with the help of excessive promotional
strategies, and aggressive advertising. Paytm can use social media for excessive marketing
and answer their queries. Moreover, Paytm can also provide education to consumers
regarding the services and the company.

4. Diversification

Ansoff matrix encourages diversification strategy for growth. It means companies have to
produce new products and introduce them in new markets to spread the risk in different areas.
Paytm adopted this strategy and introduced Financial services, ICICI life insurance, gold loan
repayment mannappuram, and metro card. This helps the company in securing the position in
the financial market other than the retailing segment. This mitigates the risk to a greater area.
In addition to this, the company also expanded its product portfolio as product penetration in
the industry. This also helps Paytm to increase its overall share in the market. More
consumers will start using the company’s products and services, thus, benefiting the company
in long run

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5.4 McKINSEY 7s FRAMEWORK

STRATEGY:

❖ Clearly defined 
The strategic direction and the overall business strategy for Paytm Building a
Payments Network are clearly defined and communicated to all the employees and
stakeholders. This helps the organization manage performance, guide actions, and
devise different tactics that are aligned with the business strategy. Moreover, the
business strategy’s definition and communication also make operations for Paytm
Building a Payments Network more transparent and aligns the responsibilities and
actions of the company.
❖ Guiding behaviour for goal attainment
The strategic direction for Paytm Building a Payments Network is also important in
helping the business guide employee, staff, and stakeholder behaviour towards the
attainment and achievement of goals. SMART Goals are set with short and long term
deadlines in accordance with the business strategy. The business strategy helps

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 employees decide tactics and behaviours for attaining the set goals and targets to help
the business grow.
❖ Competitive pressures
Paytm Building a Payments Network’s strategy also takes into consideration the
competitive pressures and activities of competitors. The strategy addresses these
competitive pressures through suggestive measures and actions to address competition
via strategic tactics and activities that ensure sustainability to Paytm Building a
Payments Network via adapting to market changes, and evolving consumer trends and
demands.
❖ Changing consumer demands
An important aspect of the strategy at Paytm Building a Payments Network is that it
takes into constant consideration the changing consumer trends and demands, as well
as the evolving consumer market patterns and consumption behavior. This is an
important part of the strategic direction at Paytm Building a Payments Network as it
allows the company to remain competitive and relevant to its target consumer groups,
as well as allows the company to identify demand gaps in the consumer market. 
The company then strategically addresses these gaps through product offerings and
marketing activities which give the company successful and leading-edge over other
patterns in the market.
❖ Flexibility and adaptability
The strategy at Paytm Building a Payments Network is flexible and adaptable. This is
an important aspect of the strategic direction, and strategy setting at Paytm Building a
Payments Network. Rigidity in strategy leads a company and a business to often
become stagnant and obstructs advancement, and progression with evolving changes
in the consumer markets. 
With flexibility and adaptability, the Paytm Building a Payments Network is not only
able to benefit from quickly reacting and responding to changing consumer patterns
globally, but is also able to locally and culturally adapt its products via localization
for different countries and regions. Moreover, the company is often able to
proactively predict consumer market changes, and devise strategic changes
accordingly to meet the market trends.

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STRUCTURE:

❖ Organizational hierarchy
Paytm Building a Payments Network has a flatter organizational hierarchy that is
supported by learning and progressive organizations. With lesser managerial levels in
between and more access to the senior management and leadership, the employees
feel more secure and confident and also have higher access to information. Moreover,
the flatter hierarchy also allows quicker decision-making processes for Paytm
Building a Payments Network and increases organizational commitment in the
employees.
❖ Inter-Departmental coordination
Paytm Building a Payments Network has high coordination between different
departments. The company’s departments often form inter-department teams for
projects and tasks that require multiple expertise. All coordination between different
departments is effective and organized. Paytm Building a Payments Network has a
systematic process for initiating and monitoring coordination between departments to
ensure smooth work operations and processes – and goal attainment.
❖ Internal team dynamics
Paytm Building a Payments Network encourages teamwork and team-oriented tasks.
Where jobs require individual attention and scope, the company also assigns
individual responsibilities and job tasks. However, all employees at Paytm Building a
Payments Network are expected to be team players who can work well with and
through other members, and who get along well with other people. The teams at
Paytm Building a Payments Network are supportive of all embers and work in synch
with synergy towards achieving the broader team objectives and goals under the
Paytm Building a Payments Network designed strategy and values. 

❖ Centralization vs. decentralization

Paytm Building a Payments Network has a hybrid structure between centralization
and decentralization. Like many progressive organizations, Paytm Building a
Payments Network largely supports decentralized decision making. Job roles at Paytm
Building a Payments Network are designed to be carried out with responsibility, and
employees often set their goals with mutual coordination and understanding with the
supervisors. 

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 However, Paytm Building a Payments Network is also centralized in making sure that
supervisors oversee, and approve of the various efforts, and tactics that employees
choose to ensure that they are aligned with the organizational strategy ad values. 
❖ Communication 
Paytm Building a Payments Network has a developed and intricate system for
ensuring communication between employees, and different managerial levels. The
communication systems at Paytm Building a Payments Network enhance the overall
organizational structure. The systematic, defined, and organized communication
allows an easy flow of information and ensures that no organizational tasks and goals
are compromised because of a lack of communication, or misunderstandings. 

SYSTEMS

❖ Organizational systems in place

Paytm Building a Payments Network has defined and well-demarcated systems in
place to ensure that the business operations are managed effectively and that there are
no conflicts or disputes. The systems at Paytm Building a Payments Network are
largely departmental in nature, and include, for example:
● Human resource management
● Finance
● Marketing
● Operations
● Sales
● Supply chain management
● Public Relation Management
● Strategic leadership
❖ Defined controls for systems
Each of the defined and demarcated systems at Paytm Building a Payments Network
has especially designed tools and methods as controls for evaluating performance and
goal attainment. These controls and measures are designed specifically in different
departments based on the nature of their tasks and responsibilities. Moreover, each
department also designs specific controls for members for performance evaluation, as
well as for inter-departmental tasks and responsibilities.
❖ Monitoring and evaluating controls

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 Paytm Building a Payments Network continually evaluates its systems through the
designed controls. This monitoring of the performance is continual and ongoing. This
is largely done through observation and informal discussions. Feedback to employees
and overall department heads is informally given regularly as and when is required.
Formal evaluation of performance is also conducted semiannually – or quarterly,
depending on the need and the urgency of the projects and assigned tasks. This is a
formal process that is undertaken by supervisors and managers to ensure the
identification of performance lags, and suggestive means of improvement.
❖ Internal processes for organizational alignment
Paytm Building a Payments Network also has special processes and methods for
ensuring that all departments and systems within the organization are aligned and
working in harmony towards the greater business goals and targets. This is made
possible through ensuring that all systems are designing and working towards goals
and targets specific to their expertise under the broader business vision and strategy.
Moreover, the strategic leadership at Paytm Building a Payments Network also
ensures that all systems are allocated with resources, and set specific targets to
achieve similar business goals in any specific period. 

SKILLS

❖ Employee skills

Paytm Building a Payments Network has a commendable workforce, with high skills and
capacities. All employees are recruited based on their merit and qualifications. Paytm
Building a Payments Network prides itself on hiring the best professionals and grooming
them further to facilitate growth and development.

❖ Employee skills vs task requirements

Paytm Building a Payments Network has defined tasks and job roles and hires and trains
employees for skill levels accordingly with respect to those. The company ensures that all its
job requirements are met and that employees have the sufficient skills to perform their
respective jobs in accordance with the values and culture as well as the business goals and
strategy of Paytm Building a Payments Network. 

❖ Skill management

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Paytm Building a Payments Network pays particular attention to enhancing the skills and
capacities of its employees. It arranges regular training and workshops – internally as well as
externally managed- to provide growth and development opportunities for its employees.
Paytm Building a Payments Network focuses on personal as well as professional growth for
its employees and works accordingly with them.

❖ Company’s competitive advantage

The human resource is one of the core competitive advantages of the company. The skills of
employees are developed specifically for job roles and requirements at Paytm Building a
Payments Network and provide a competitive benefit to the company – where players cannot
imitate employee skills or training. This creates a unique and non-substitutable competency
for Paytm Building a Payments Network. 

SHARED VALUES

❖ Core values
The core values at Paytm Building a Payments Network are defined and
communicated to foster a creative and supportive organizational structure that will
allow employees to perform optimally, and enhance their motivation and
organizational commitment. The core values at Paytm Building a Payments Network
include, but are not limited to:
1. Creativity
2. Honesty
3. Transparency
4. Accountability
5. Trust
6. Quality
7. Heritage
The Paytm Building a Payments Network business also ensures that all its activities
and operations are conducted with high ethical and moral standards that are redefined
and benchmarked against international criteria. 
❖ Corporate culture
Paytm Building a Payments Network encourages an inclusive culture that celebrates
diversity. The company has an international presence, and production units that are

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 spread across different countries, as such, Paytm Building a Payments Network
ensure that its organizational culture is supportive of diversity, and has internal
policies to reduce incidences of discrimination.
The corporate culture at Paytm Building a Payments Network also encourages
innovation and creativity by allowing independence for growth to individuals and
teams –thus helping them refine their careers as well as personalities. Lastly, the
corporate culture at Paytm Building a Payments Network also has a supportive
leadership which works towards increasing employee motivation and job satisfaction
by giving way to visibility and accessibility.
❖ Task alignment with values
Paytm Building a Payments Network ensures that all its job tasks and roles are
aligned with the core values that the company propagates. This means that all
activities, tactics, and strategic tactics employed by Paytm Building a Payments
Network will reflect its core values, and will not deviate away from these. This is to
ensure a consistent, and reliable brand image, as well as an honest organizational
culture. In the event of organizational change, the company will continue to ensure
that all change management processes and methods incorporate the core values so
that the organizational culture is consistently maintained, and systematically changed
if need be. 

STAFF

❖ Employee skill level vs business goals

Paytm Building a Payments Network has a sufficient number of employees employed
across its global operations. Employees for different job roles and positions are hired
internally as well as externally – depending on the urgency and the skill levels
required. Based on this, it is seen that Paytm Building a Payments Network has
employees who are skilled as per the requirements of their job roles and positions. All
employees are given in house training to familiarize themselves with the company and
its values. External training along with in-house training is provided for skill level
enhancement.
All job roles and positions are designed to facilitate the achievement of business
goals, and as such, employee skill level at Paytm Building a Payments Network is
sufficient to achieve the business goals of the company. 

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 ❖ Number of employees
Paytm Building a Payments Network has employed a large number of employees. The
number of employees varies from country to country as per the requirements and
needs of the business and operations. The global team of Paytm Building a Payments
Network is an inclusive one that accepts, and encourages diversity, and works in
synchronization with members to ensure attainment of business goals. The team
member sand employees are the most important part of business success for Paytm
Building a Payments Network.
❖ Gaps in required capabilities and capacities
Paytm Building a Payments Network has a well-defined system for identifying
potential needs of capabilities and capacities for the organization. The human resource
function of the business has a systematic process that aligns all other departments to
identify potential vacancies or skill gaps. Based on the nature of the need, the human
resource department arranges for recruitments which may be permanent or contractual
in nature, as well as arranges training sessions if need be for the current workforce. 

STYLE

❖ Employee skills
Paytm Building a Payments Network has a commendable workforce, with high skills
and capacities. All employees are recruited based on their merit and qualifications.
Paytm Building a Payments Network prides itself on hiring the best professionals and
grooming them further to facilitate growth and development.
❖ Employee skills vs task requirements
Paytm Building a Payments Network has defined tasks and job roles and hires and
trains employees for skill levels accordingly with respect to those. The company
ensures that all its job requirements are met and that employees have the sufficient
skills to perform their respective jobs in accordance with the values and culture as
well as the business goals and strategy of Paytm Building a Payments Network. 
❖ Skill management
Paytm Building a Payments Network pays particular attention to enhancing the skills
and capacities of its employees. It arranges regular training and workshops –
internally as well as externally managed- to provide growth and development
opportunities for its employees. Paytm Building a Payments Network focuses on

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 personal as well as professional growth for its employees and works accordingly with
them.
❖ Company’s competitive advantage
The human resource is one of the core competitive advantages of the company. The
skills of employees are developed specifically for job roles and requirements at Paytm
Building a Payments Network and provide a competitive benefit to the company –
where players cannot imitate employee skills or training. This creates a unique and
non-substitutable competency for Paytm Building a Payments Network. 

❖ Management/leadership style

Paytm Building a Payments Network has a participative leadership style. Through a

participative leadership style, Paytm Building a Payments Network is able to engage
and involve its employees in decision-making processes and managerial decisions.
This also allows the leadership to regularly interact with the employees and different
managerial groups to identify any potential conflicts for resolution, as well as for
feedback regarding strategic tactics and operations. Through its participative
leadership, Paytm Building a Payments Network is able to enhance employee
motivation, and increase organizational commitment and ownership amongst
employees as well as other stakeholders.

❖ Effectiveness of leadership style

The participative leadership style is highly effective in achieving the business goals
and vision of the organization. Employees feel to be active members of the
organization who are valued for their suggestions, feedback, and input. Moreover,
through participative leadership, leaders and managers are able to identify current and
potential conflicts within the Paytm Building a Payments Network organization, and
actively work to resolve them as soon as possible. 

❖ Cooperation vs competition – internally

With its supportive and encouraging organizational culture, Paytm Building a

Payments Network gives way to internal collaboration and cooperation between
employees, systems, teams, and departments. This cooperation and collaboration at

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 Paytm Building a Payments Network is important since its operations are spread
globally, and also because tasks and responsibilities within the company often require
inter-departmental feedback and input. Moreover, with increased expansion, and
synergy, the business also regularly forms project teams – which function effectively
because of the cooperative and collaborative culture within the Paytm Building a
Payments Network organization. 

❖ Team vs groups

Paytm Building a Payments Network has effective and functional teams and works
with them internally to achieve its various business goals and objectives, and
complete tasks. The company’s management is encouraging and supportive, and the
leadership provides a motivating and pragmatic vision toad achieve. The human
resource management system, as well as the organizational training, supports all
employees in their growth fairly and transparently. This leads to effective team
formation instead of nominal groups within the organization for various projects, as
well as department-specific tasks and roles. 

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CHAPTER VI: MANAGEMENT CONCEPT

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6.1 Introduction to the Business Model of Paytm

Today, technology has come a long way and progressed so much that everything is done
online. Even payments and monetary transactions also take place online. A lot of online
websites and mobile apps have emerged that are used by people for commercial purposes.
And one such app that has gained giant popularity in India is Paytm. In less than a decade
since its existence, Paytm has earned the trust of the Indian public which is saying a lot when
it comes to commercial transactions. Paytm along with its success, has also paved the way for
a lot of other mobile applications and websites to do business in India.

Paytm was launched with the idea of cashless transactions. Available in 11 Indian languages,
it works both through a website and an application. By the end of January 2018, it had a value
of $10 billion. Not only this, it is the only Indian startup to receive funds from the Chinese e-
commerce giant, Alibaba.

With Paytm, users get online use-cases such as-

● Mobile recharges
● Utility bill payments
● Travel, events and movies bookings

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 ● In-store payments at grocery stores, vegetable and fruits shops, restaurants, tolls,
parking, pharmacies and educational institutions that have Paytm QR code

Paytm stands for Pay through Mobile and encourages customers to make cashless payments.
Initially, it started as an online recharge website. But later this model changed into a virtual
bank and marketplace model. It also works on the cashback business model.

Paytm works on a marketplace cum payments bank model. It deals with services such as
mobile recharges, travel, movies, event bookings, utility bill payments. It also deals in-store
payments at grocery stores, fruits and vegetable shops, parking, tolls, pharmacies, restaurants,
and educational institutions with the Paytm QR code.

Now let us look at the revenue model of Paytm to understand how it makes money.

Customer segments that are targeted by the business model of Paytm are those who want to
appreciate the convenience of e-wallet, plus those who preferably use mobile and
Smartphone devices to channelize their day to day activities.

Key activities performed by Paytm include transferring funds, protection from the frauds and
top-notch security. Involving in recharge business, Paytm wallet along with e-commerce
verticals and Digital Gold are some of the value propositions of the Paytm Business model.
Channels used by the business model of Paytm for running its activities include Paytm
website, client sites, vendor sites and Paytm App.

6.2 Cost Structure of Paytm Business Model 

Different factors upon which the cost structure of Paytm is based upon include-

● Major expenses for adept channelization of Paytm platform

● Customer acquisition maneuvers
● Salaries of the employees

Now, after knowing everything about the adept channelization of the business model of
Paytm, the next thing that you should pay attention to is the revenue generation streams of
Paytm. To understand the Business model of Paytm, we need to look at the various activities

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responsible for generating revenue for the company.Paytm does not charge money directly
from its customers; it rather uses several indirect ways to earn money which are given below:

1) Paytm Mall

Paytm was the first company to launch mobile-only shopping. It allows the sellers to list and
sell their products on the Paytm portal. For this, it charges a commission from the sellers
which differs for different categories of products.

2) Listing and convenience fee

Paytm charges listing and convenience fees from the sellers to sell their products on their
portal.

3) Recharge Services

Paytm’s initial purpose was to serve as an online recharge service. Though, Business Model
of Paytm includes several activities; the online recharge service remains one of the key
activities. Recharge is available for all the telecom service providers. Paytm charges a
commission of 2-3% on each recharge. The services are efficient and exemplary, which has
helped Paytm to expand and grow exponentially.

4) Bill Payments

In addition to the recharge service, Paytm allows the customers to pay their bills such as
water, rent, electricity, phone bills. It has also partnered with educational and financial
institutions and receives payments on their behalf .Like most of the other activities, it charges
a commission from these service providers.

5) Payment solutions

Paytm offers payment solutions to online businesses. It allows them to receive payment
through Paytm. For this, it charges a commission on the transaction amount.

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6) Digital Gold

Gold is the safest investment in India. Paytm has capitalized on it by partnering with gold
refiner MMTC-PAMP. It has launched Digital Gold, which allows the customers to buy, sell,
and store gold digitally.Customers can also get the gold delivered by paying a minimal
delivery charge.

7) Payments bank

A payments bank is a bank that can accept deposits and provide interest to the customers but
cannot carry out lending services. Paytm lets a customer open a zero deposit digital current
and savings bank accounts.It gives a 4% interest on the savings account deposits and an
overdraft facility for the current account.

This is how Paytm earns money through payments banks when it cannot carry out lending
activities:

1. Cross-Selling: Paytm sells the products and services of other financial institutions on
its portal. It charges a commission based on the agreement between the parties.
2. Internet arbitrage: Paytm deposits the money with some other bank which provides
higher interest than the interest offered by Paytm bank on its deposits. The difference
between both benefits becomes profit.

8) Paytm wallet

Paytm wallet allows the customers to store currency in digital form. It is a semi-closed wallet
which helps the customers to buy goods and services and pay for them digitally.The money
deposited by the customers is stored in an escrow account with the partner bank. And this
deposit fetches interest for Paytm just like any other bank deposits.

9) OTA bookings

Paytm has recently entered into the Online Travel Agency model (OTA). In this part of the
Business Model of Paytm, it lets the customers’ book train, air, or bus tickets. It also provides
hotel booking services.Paytm charges a certain percentage of commission on the total
bookings. The rate of the commission depends on the type of bookings. Now that we have

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understood the Business Model of Paytm along with its revenue model; let us look at the
marketing strategies followed by Paytm to promote its services.

6.3 Unique Marketing Strategy

Paytm has used several ingenious marketing ideas to support its business model. Let us some
at some of those ideas:

1) Soldier Mobile Game

In this game, Spartan Paytm soldiers fight an army of frauds. This idea of launching a game
attracts both tech-savvy people and game lovers. Not only this, but it also makes people
aware that Paytm protects their customers’ accounts.

2) Automatic messages

Paytm sends reminder payments messages to its customers.

It reminds the customers to pay their bills and at the same time says that it is easier to make
payments through Paytm.

3) Contests
Paytm contest such as wheel of fortune, cards collection etc to engage customers to use the
app. There are various cashback offers as well which motivates customers to use their app.

5) Title sponsorship of Indian Cricket

Paytm has signed a deal with BCCI and retained the title sponsorship of the Indian Cricket
team for five years.In a country where Cricket is nothing less than a religion, sponsoring the
cricket team for such a long time can prove as a deal-breaker in retaining and bringing new
customers.

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 CHAPTER VII: CONCLUSION/ FINDINGS

CONCLUSION

● India has the third-largest start-up ecosystem in the world, with an average of three
tech start-ups born every hour. The expectations were high for 2020, considering that
2019 was a blockbuster year in the history of start-ups in the country, with $14.5
billion in funds raised cumulatively.
● However, the Covid-19 pandemic emerged, disrupting financial markets and leaving
the world teetering on the edge of an economic downturn
● As a result, seed funding – a start-up’s first step towards raising capital – is projected
to decline by 22 per cent in India (in Q1 2020 vis-à-vis Q4 2019). These short-term
challenges can be turned into long-term opportunities for strong companies that are
willing to transform swiftly.
● The Indian start-up ecosystem has been agile in adapting itself to the dynamic
business environment. A case in point is that of online payment, which, over the past
few months, has become common among all the citizens because of covid 19. Most of
the people started believing in cashless transactions.
● As the situation around the health emergency continues to evolve, start-ups are
focusing their efforts on the ‘how’ and ‘what’ needs to be done to weather the impact
of the coronavirus outbreak.
● The unprecedented situation calls for businesses to commit to the health and safety of
not just their employees, but also of the community, customers, and partners.

FINDINGS

Paytm is one among the best mechanical advancement in the present century and the
administrations offered by Paytm helps in Time utilization and furthermore it is anything but
difficult to utilize. What's more, for the up and coming business visionary's Paytm example of

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overcoming adversity would be extremely motivational and a lesson to learn before
beginning another wander. Achievement of Paytm could be it was a plan of action presented
in the wake of concentrate the current circumstance winning in our nation and that is the
reason it went ahead to wind up outstanding amongst other arrangement after demonetization.
Can get consideration in the general public as it centers around making mindfulness among
individuals. Instructing individuals about its administrations. Fruitful treatment of Paytm by
purchasers and shippers is the best case of its positive effect in the general public. Paytm is
the best case of an organization which used online business to advertise better.

Since its inception in 2010, Paytm has grown exponentially and today has a large customer
base in India. The company has managed to capitalize on various opportunities like at the
time of demonetization. The company has been innovating consistently and putting out new
services for its customers that make the customers’ lives easy. Paytm business model is
something that other up-and-coming companies can learn from. With India on the verge of
becoming a digital and cashless economy, the Business Model of Paytm has been successful
in making a mark in the Indian financial and service sector.If such diverse and creative
marketing strategies continuously support the Business Model of Paytm, Paytm will grow at
such a fast-pace that it will underscore the growth of the Indian economy.

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CHAPTER VIII: BIBLIOGRAPHY / REFERENCES

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BIBLIOGRAPHY / REFERENCES

● Griffith, Erin, “Why startups fail, according to their founders”,2014.

http://fortune.com/2014/09/25/why-startups-fail-according-to-their-founders/ ∙ India
filings Report, “Challenges faced by Startups in India”,2016
● Mittal Ashish, “Indian Startups: Challenges and Opportunities”, Economic Times,
2014 https://economictimes.indiatimes.com/small-biz/startups/indian-startups-
challengesand-opportunities/articleshow/45272
● Nathani, Komal “How this Start-up has Realized the Dream of Buying a Holiday
Home for Many Indians”, Entrepreneur India, 2018
● Rediff.com, “20 good opportunities in India for entrepreneurs”, Rediff, 2010
http://business.rediff.com/slide-show/2010/may/04/slide-show-1-good-
opportunitiesfor-entrepreneurs.htm
● Pandita ,Shivani, “ 10 Financial problems faced by startups and their possible
remedies”,Knowstartup.com,2017 http://knowstartup.com/2017/02/10-financial-
problem-faced-by-startups-and-theirpossible-remedies/
● Raj, Priyanka, “Indian Startups Booming During the COVID-19 Pandemic”,
inventiva.co.in,2020 https://www.inventiva.co.in/stories/priyankaraj/indian-startups-
booming-during-thecovid-19-pandemic/
● Trisha, Medhi,” Meet the 6 edtech startups that have seen record growth amid
COVID-19 lockdown”, Yourstory.com,2020 https://yourstory.com/2020/06/edtech-
startups-growth-coronavirus-byjus-unacademytoppr-startups
● Adhana, D.K. (2016). Start-up India, Stand-up India: India turning into a start-up hub
by prospering entrepreneurial culture. International Journal in Management and Social
Science, 4(2), 368-384.

WEB LINKS
https://paytm.com/

https://www.startupindia.gov.in/

https://www.thehindubusinessline.com/money-and-banking/merchant-payments-are-the-
primary-business-model-of-paytm-founder-ceo/article30790605.ece

https://blog.finology.in/entrepreneurship/Paytms-Money-Minting-Business-Model

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https://cdacmohali.in/paytm-business-model/

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