“Eventually this business is of user acquisition despite mounting losses. This strategy will not stop,” said Yugal Joshi, vice-president at Texas-based consultancy Everest Group. “Therefore, a large part of this investment will still go down this route of expanding to newer locations and merchants.”

Cash rules everything

Paytm has a strong foundation to help it weather the storm—the who’s who of the investment world is backing it, including Japan’s Softbank, China’s Ant Financial (Alipay) and Alibaba Group, SAIF Partners, and Berkshire Hathaway.

Its corpus has long been loaded. This latest funding was its second $1 billion-plus round. It had raised $1.4 billion from Softbank two-and-a-half years ago. This made history as the largest funding round from a single investor in India.

The market sure is set to heat up further. Besides existing players, there is the tangible threat of India’s largest messaging app, WhatsApp, rolling out its payment options for its 400-million strong userbase. Paytm has only 230 million.

Though WhatsApp has been beta testing in the country since February, it is yet to overcome regulatory hurdles for a full-scale rollout. The day that happens, Paytm’s reign could end, experts believe.

Diversification for what?

What were once Paytm’s novelties are no longer that.

For instance, one of its claims to fame in the recent funding announcement is how the Sharma-led company “pioneered low-cost digital payments acceptability in India using its QR-code technology in local shops and retailers.”

While it may have been a first-mover, that advantage doesn’t entirely stand today. “There’s a sudden explosion of QR codes visible at PoS counters, where you’d mostly see only Paytm earlier: BHIM UPI, Google Pay, and others, and less often BharatQR,” said Roy. “There’s a big push online by Google, Amazon Pay, et al, with offers and schemes, including cashback, once largely a Paytm domain. They’re eating Paytm’s lunch.”

With the fintech pie being split among more players, “Paytm is trying various things to stay relevant with entry to travel, ticket bookings, e-commerce, etc and this funding is probably to support it,” said Harish HV, an independent tech analyst. “It has a strong brand recognition and a set of customers, many of whom are sticky and can be cross-sold other products and services.”

However, taming the giant won’t come easy for its leader.

With every funding round, the Paytm founder’s stake gets diluted. Sharma’s stake was already at 15.4% in February 2019. The company has not filed the details of the latest round yet, according to data tracking startup Tracxn. Although, it is likely to have been sliced down further.

“Given the amount of funds raised, VSS likely has low equity holding on a percentage basis,” said Kartik Hosanagar, a professor of technology and digital business at the Wharton School at the University of Pennsylvania. “But the company’s valuation is very high so his stake in Paytm is still worth a lot on paper.”

Despite his wealth ballooning—VSS is a Forbes billionaire—his autonomy at the firm may go down with every dollar in.

📬 Sign up for the Daily Brief

Our free, fast, and fun briefing on the global economy, delivered every weekday morning.