Outside of payments, Paytm has diversified into financial services (insurance, wealth management, digital gold), travel and movie ticketing, fantasy sports, and e-commerce. It even launched a payments bank (a bank operating on a smaller scale without involving any credit risk). But these attempts to generate more revenue streams have not had the desired effect. Instead, the startup has spread itself too thin.


In 2019, founder and CEO Vijay Shekhar Sharma said Paytm would not go public until it became profitable. But when it filed its pre-IPO document, it warned that it may not “achieve or maintain” profitability in the future.

Paytm reduced its losses by almost 40% to Rs1,596 crore ($215 million) in fiscal year 2020-21 versus a year ago, but its still nowhere close to being in the black.

Moreover, while its losses are shrinking, so is Paytm’s revenue. In FY21, it fell by 11% to around Rs3,187 crore.

Nykaa, whose founder Falguni Nayar had also said she would not take the company public until it turned a profit, is profitable—and has been for three years now. Furthermore, its revenue from operations grew 38% year-on-year to Rs2,441 crore in the last fiscal year.

Star power

Recently, Paytm has started cutting down on marketing costs but for years, it splurged big bucks. The online business burned cash releasing campaigns across TV, print, radio and social media for its app. Last year, it also roped in cricketing legend Sachin Tendulkar as an ambassador for its fantasy sports offering, Paytm First Games.

Nykaa, which sticks to only digital marketing, harnessed the power of the internet better. It has about 1,300 influencers creating videos, promoting its products, and educating viewers. They reach the exact target audience Nykaa wants to acquire and retain as customers—all that, at a low cost to the company.

Plus, the beauty e-tailer has some Bollywood celebrity clout of its own to flaunt: Actors Alia Bhatt, Janhvi Kapoor, and Katrina Kaif have invested in the company, signed on as a brand ambassdor, and launched an exclusive brand on Nykaa respectively.

📬 Sign up for the Daily Brief

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