For Paytm Boss, Vijay Shekhar Sharma, Sachin Bansal Is The Reason India Has A Vibrant Startup Ecosystem


In The Inc42 Facebook Live AMA, Vijay Shekhar Sharma Talks About Paytm, His Product Philosophy And More

If there is one word that describes Paytm boss Vijay Shekhar Sharma, it is “hustler”. A self-taught programmer, a child prodigy who had graduated as an engineer by the time he was 19, an entrepreneur in college, and now the founder of one of India’s most renowned and valuable fintech startup, Vijay has been hustling his way to success through all the thicks and thins of his life.

Back in 1997 when he was still in college, he started the website and sold it two years later for $1 Mn. He started One97 (Paytm’s parent company) with a loan of $12,525 (INR 8 lakhs) and when the repayment became tough, he did not shy away from taking up all sorts of jobs to make ends meet like setting up LAN connections, delivering guest lectures and so on to make ends meet.

From there to reaching 230 Mn customers on Paytm to launching Paytm Payments Bank to making his debut on the Forbes Billionaire list with a net worth of $1.3 Bn as well as on the 6th “Hurun India Rich List 2017” to buying a $12.72 Mn (INR 82 Cr) worth 6,000 ft. residential propertyin Lutyen’s Delhi, Vijay Shekhar Sharma has come a long way, interestingly all this happened this year and thus, he ended up on Inc42’s Newsmakers of 2017 list too.

So while this year has been the year of fintech for the Indian startup ecosystem. I would say it was the year for Paytm. But more than all these accolades, was the $1.4 Bn funding from SoftBank Group, the Japanese Internet and telecom major, which is a big endorsement for the fintech startup. Paytm is now one of SoftBank’s biggest bets in India (biggest being Flipkart) and has received just the right kind of fuel to fire its course further.

Internally in the team, he is known as the Resident DJ of Paytm. But the world should remember that he was the only Indian besides PM Modi who made it to the TIME Magazine’s 100 Most Influential People list in 2017 and was also named as UN Environment Program patron for Clean Air.

In an Inc42 Facebook Live AMA, Vijay Shekhar Sharma, who also happens to be a die-hard fan of Jack Ma and Masayoshi Son (Masa), bares it all and reveals why Sachin Bansal is the reason that this country has this bright vibrant startup ecosystem.

Building A Paytm Ecosystem

Question: After crossing 100 Mn downloads on Playstore and becoming the first payments app to do so, what is your goal now?

Vijay Shekhar Sharma: In our office, we carry a poster with audacious goals and in the early days when we were building Paytm, it used to say “1 Mn orders in a day will happen here first.” Now what we are seeking is 100 Mn MAUs as an app and I wish we could do that in 2018. Right now we have 100 Mn visitors but we want them to be transacting users.

Question: Paytm has multiple products like wallet, Paytm Mall and Paytm Payments Bank. For a layman, it might look like Paytm is getting into many things. What is the bigger vision of Paytm and how do these products fit into that vision?

Vijay Shekhar Sharma: We are not a commerce company or a payments company. I have always said we an Internet company and mobile Internet is our heyday moment of truth. So we will go into as many good things we can do, which we can offer to our customers and build an ecosystem.

So it’s not a company but an ecosystem of companies and businesses. 2017 has seen ecosystems getting built. So companies which are doing content commerce, and advertising are the three verticals of our ecosystem. Commerce has been a very visible space where everyone has got in. That is what we have focussed on and ended up growing towards financial services.

Our business model is such that customers come on our platform for payments and we make money when we cross-sell or upsell a certain amount of commerce services.

Question: Earlier this year, Paytm raised $1.4 Bn from Softbank. What were the negotiations like when negotiating for a round as big as $1.4 Bn?

Vijay Shekhar Sharma: Masa’s viewpoint is very clear that he wants to be a financial investor in large Internet companies much early in the business. You may say a couple of billion dollars is not much early, but still, at the stage they invest, it is early enough to be called early. The math that they follow is that they want to own 20% of the startup. So what should they pay for 20% is what they look at.

So in my conversation with him, it was clear that we were keeping the Mall, the payments bank and the wallet separate. While he was interested in investing in all the three, I was clear that we just wanted to keep the three separate. So the amount being offered was higher but my stand was that it was good to have just the $1.4 Bn and not a larger sum and we will talk about those companies much later. So from a larger amount, I actually settled on a smaller amount!

Question: Recently you were appointed as the UN Environment’s patron for clean air.  Considering the situation here in Delhi and many other Indian cities, its time to increase focus on the same. How did this happen and what does this role entail?

Vijay Shekhar Sharma: I was in Davos and was part of UN green finance agenda where we were discussing how technology company like ours can enable green finance so that you limit the use of paper currency. I ended up speaking from my heart there that I was born in Aligarh and I have my heart in Delhi – a city which gave me everything. But today the environment is such that it wants to make you move out of Delhi.

This city is telling us that we are not taking care of it. So it was an emotional city-centric pitch which made the people in that room understand that this guy is very serious about it. They asked me and I thought it is an opportunity to bring back clean air to Delhi, so why not?

Question: Who is your favorite entrepreneur in the Indian startup ecosystem?

Vijay Shekhar Sharma: Sachin Bansal because he is the reason this country has this bright vibrant startup ecosystem. Number two would be Bhavesh Agarwal as he is the truest alpha.

Question: Who is your favourite investor in the Indian startup ecosystem?

Vijay Shekhar Sharma: Saif Partners as they are partners, not investors.

Question: The most innovative startup that you have seen lately?

Question: Who do you consider the biggest competitor of Paytm?

Vijay Shekhar Sharma: Every year people criticise us maybe they are our competitors but we haven’t found out who our competition is being an ecosystem. Technically India will have three ecosystems.

  • One is ours which is Alibaba, Paytm, Softbank.
  • Another is Naspers-Tencent where they have  MakeMyTrip, Flipkart, PayU.
  • The third is Amazon.

Now you also have Google and Facebook. In the end, it will be these ecosystems.

Question: If Paytm is not there tomorrow and you have to start again from scratch, which industry will you venture into?

Vijay Shekhar Sharma: Electric Vehicles, because it’s here and now and it’s better.

Question: Among all the investors of Paytm, who do you like the most?

Vijay Shekhar Sharma: Ravi is a partner. Alibaba is like the people who know this world. Masa is the cutest. Alibaba has the biggest influence, Masa is nice and cute-you feel so delighted and inspired in his company. And incidentally, four of us own 97% of this company.

Question: Toughest business decision you had to make?

Vijay Shekhar Sharma: To take money from Alibaba or not. We were not sure if the would invest or not considering there were many competing investments happening. So we were not sure if we are putting our bets with a partner who would be a long-term partner or not. It was tough because we did not have money and had to take a decision and their decisions were slow.

Question: How do you handle security at Paytm?

Vijay Shekhar Sharma: Security is one of the most important features. The very reason that we exist as a payment platform and one of those who are successful will be because we took care of security more than others. I am sure lot of you know this that PayPal team says that our success was not because we were superior but because we were superiorly secure and safe.

Question: Is Paytm looking into cryptocurrencies and incorporating blockchain technologies?

Vijay Shekhar Sharma: Blockchain is a technology that is used behind the scenes and we use it for fraud detection and so on and so forth. Cryptocurrencies yes but I want to make sure I just don’t want to do something which is illegal. I am just waiting for the government to help us understand.

Question: When will Paytm start its drone delivery system?

Vijay Shekhar Sharma: We are not yet into logistics. We do believe in local city logistics. Our Paytm Mall is built around local city logistics where the shopkeeper is the source of goods. Drone is not on our radar in the next six to nine months.

Question: Any plans of IPO for One97?

Vijay Shekhar Sharma: Right now we don’t have any need because of private funding.

Question: When will Paytm breakeven?

Vijay Shekhar Sharma: We already have a contribution margin breakeven which means we are contribution margin positive. If you want to talk about EBITDA positive, for that you have a choice. We see newer businesses and more customers to be acquired so we keep spending on those, not on the traditional businesses.

Question: How would you define the culture of Paytm in one word?

Vijay Shekhar Sharma: There are three culture statements that we have – “no fear, no greed, no entitlement.” This means that we won’t fear whoever you are, and we won’t carry any sense of entitlement that we will be successful just because of what we are. I think we are originally hard working people, so hard work is the one word that defines our culture.

Question: Could you shed some more light on the Paytm accelerator launched recently?

Vijay Shekhar Sharma: It’s not a physical space or a batch concept. What we are trying is that lot of people in colleges or companies want to build something, which is not necessarily commercially viable models. Our intention is to support such people and give them space in the office or otherwise support them with an infrastructural capability that we have and hopefully they can contribute what they build to open source.

So unlike a common accelerator benchmarked on how many companies got Series A, we want to focus on how many are committed to open source. Our intention is to commit to open source community so that an entrepreneur becomes a giver and not just a taker.

Question: With BHIM app on the rise, is it the end of the Paytm wallet?

Vijay Shekhar Sharma: I think customers will carry money in bank account, Paytm bank account, wallet, vouchers and gift cards. So payment options are comprehensive. Our business model as Paytm is payments, not just wallet alone. So people should understand that we are a payments company, not a wallet company. The wallet is one of the kinds of payment options.

So if we do in a month, 250 Mn transactions, only a certain subset of them comes from wallets. A large subset comes from cards, a large subset comes from UPI now, and then net banking and everything else. So we are a payments company, we are not a wallet company. And now we are a bank! So Paytm ka ATM is a brand we have registered and you are not surprisingly far away from seeing it physically in places like Delhi.

Question: Does Paytm provide any funding support for startups?

Vijay Shekhar Sharma: We don’t have an obligation of investing in a large number of startups nor a dedicated fund. Now lately we have started investing in mature startups –we invested in Nearbuy and Creditmate recently.

Vijay Shekhar Sharma On His Product And Life Philosophy

Question: What will you teach children before they began their career?

Vijay Shekhar Sharma: ‘Zindagi na milegi dobaara’(You live only once). Do something so wonderful in your career that both you and you are life is taken care of!

Question: If you could back in time, what advice would you give yourself?

Vijay Shekhar Sharma: I trusted too many people, whom I should not have.

Question: How do you realise when to pivot your idea?

Vijay Shekhar Sharma: It is a very simple thing. Any idea is worth the traction it gets. If you are not getting traction, you try a few things. You try pushing hard, cleaning up some things, building up to something aggressively but if it doesn’t get traction, just don’t bother.

Question: What is your opinion on the Indian media today as you are an investor in some media startups?

Vijay Shekhar Sharma: Indian press is going through its classic moment which was expected that print and TV will give in to the online. Today anyone can be a publisher. And now the distribution has gone private also. Whatsapp group broadcasts and publications are totally un-trackable. So my worry personally is that in a world where anyone can publish anything, how to bring real, legitimate and not fake news in the world. That’s why I try to support companies who otherwise don’t get support.

So I personally don’t have the ambition to invest in media startups but I definitely have a personal intention to support the startups in media who need support so that they can build a true north in the news. That’s why I invested in The Ken and Factor daily.

Question: When you are down and upset, how do you pull yourself up?

Vijay Shekhar Sharma: By listening to music! Bono, Chris Martin, classics, jazz are what I listen to.

Question: What is your product philosophy?

Vijay Shekhar Sharma: My product philosophy is that your product should be so intuitive that you do not need someone else to help. I always tell my product team think about your mother when you are building a product because she has never used a smartphone or a computer!

Hiring, Entrepreneurship, And Startup Lessons From Vijay Shekhar Sharma

Question: What do you look for in a person when hiring?

Vijay Shekhar Sharma: I personally look for people who take decisions and stand by their decisions too. And are able to give a reason why. Everyone takes wrong decisions including me but I only want to know what is the other person thinking when taking that decision.

Question: How do you hire the best employees for Paytm?

Vijay Shekhar Sharma: There is no secret to this-I think the answer is an incredible combination of passion and skill. If you are skilled and not passionate, then you are a weight on the team. But if you are passionate and not skilled, it means it is just a hobby for you. So you should pick up the required skills.

Question: Should a business plan pitch be comprehensive or elaborate?

Vijay Shekhar Sharma: If your business plan pitch is not communicable in one line or few, it is a bad pitch. So don’t think of comprehensive or elaborate but think of a precise and crisp pitch for your startup.

Question: One near-death experience that Paytm went through?

Vijay Shekhar Sharma: A lot of people may not know this but as late as 2014 I had to pledge my shares for $9.38 Mn (INR 60 Cr). We were out of cash, there was a delay in funding, and we could not reach out to others for cash. So the only recourse left was to pledge my shares and that’s how we got a loan from HDFC bank.

Question: Many people did not know that when you started, you bootstrapped One97. What do you suggest-should a startup raise money early on or bootstrap for a while and then raise money?

Vijay Shekhar Sharma: Before I answer let me give some context to the question. 2001 is when I started and 2007 is when I raised my first Series A. Which is like seven years of no money to live through. But recently we raised $400 Mn for Paytm Mall. So from a startup which raised money after seven years to a startup which was born with a silver spoon, I can say it depends on which opportunity you are addressing.

If your opportunity is here and now, then it is very important for you to raise a huge amount of money sooner for your startup.  If you are building something that is forward of times, you should be conscious not to take large sums of money which you can’t return with time. Because investors also have exit horizons.

Question: Which do you think is the most disruptive technology?

Vijay Shekhar Sharma: Different technologies will mature in different stages. For instance, like AI is here, cryptocurrency is behind that, and driverless technology is behind that. All three will bring totally new platforms in the world.

The first set of disruption or productivity enhancement will happen from the massive amount of AI and ML. So machines will be able to do the tasks that we expect them or humans to do much better and our productivity will be many times better.

Question: What would be the best way to reach out to customers in tier 2 cities?

Vijay Shekhar Sharma: Tier 2 cities customers are also smartphone customers but in their respective local language. So a startup should target them in their local language through the smartphones. For ATL, a startup can use the print medium as it still works there.

Question: Which do you think is the most crucial skill for a startup entrepreneur to succeed?

Vijay Shekhar Sharma: If you are talking about technology startups, then coding technology, understanding technology is one of the most important skills. You can’t be successful as a technology entrepreneur if you are not a technology person.

If you are talking about non-technology startup entrepreneurs, then I would say that somewhere there is an obligation of communicating or selling because you have to communicate to your team, to outsiders.

Question: What is your new year resolution?

Vijay Shekhar Sharma: I want to go the gym and get leaner-a new year resolution of most of the masses in India!

Question: One social cause that is very close to your heart?

Vijay Shekhar Sharma: If I manage to change the air quality of Delhi, it will be the most amazing thing!

So as Paytm embarks on the next leg of its journey, Vijay Shekhar Sharma wishes that as a company, it becomes the first $100 Bn company out of this country. Happy not to invest in Bitcoins which he believes is a sparsely available commodity that everyone is looking to buy and has no use because everyone is buying to sell effectively, the Paytm Boss plans to stay away from cryptocurrencies.

Similarly, he has no interest to venture into politics to remain happy!

But talk about Paytm cloud, he might have an ace up his sleeve which he might reveal in times to come. For now, the hustler, the hard worker, who embodies the mantra no fear, no greed, no entitlement, is busy building a $100 Bn worth Paytm ecosystem.

Because Vijay Shekhar Sharma of Paytm believes that “it can be really big even in India” for a startup. Given that its the man himself who has only gone from big to bigger things in life saying it, we hardly have any doubts.

This article first appeared in

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