Vijay Shekhar Sharma led Paytm Mall, which is the e-commerce business of One97 Communications has seen a significant drop in valuation with its lead investors Chinese internet giant, Alibaba and investment firm, Ant Financial taking an exit from the firm. Paytm Mall confirmed in a statement that both Alibaba and Ant Financial are exiting the firm. Although the company did not disclose in detail the current valuation of the transaction, a note which has gone out from the Paytm Mall to its shareholders stated that the investors, Alibaba and Ant Financial (which held a stake of 28.3 per cent and 15 per cent) are exiting the firm with a secondary share value of Rs 459 per share.
"We are focussed on our transition to build a sustainable business in partnership with ONDC and are excited about the future of the e-commerce in india. As part of the sift in the business direction of the company, PEPL also saw the exit of early investors. The exit price of any investor(s) in the company via capital reduction process is not reflective of the valuation of the company and neither the exit has any link to any FDI laws," A Paytm Mall spokesperson said in a statement.
"One simple metric is to consider our cash balance itself is significantly higher than the quoted number in media reports , which establishes that the suggested low Fair Market Valuation is completely inaccurate," he added. Paytm Mall according to the Hurun Unicorns lists 2022 was valued at slightly below $1 billion, losing its unicorn valuation status from a reported $3 billion in 2020. Vijay Shekhar Sharma’s bet on offline-to-online commerce through Paytm Mall backfired amidst intense competition from Amazon, Flipkart, and Reliance as leading players. On Monday, Paytm Mall announced its pivot to India’s Open Network Digital Commerce (ONDC) with a sharper focus on e-commerce exports. “Keeping in mind our attention to building an open platform for e-commerce, our @PaytmMall ‘s business now be built on @ONDC_Official. It will be cost-effective, scalable, and bring even larger impact to small businesses,” Sharma said in a tweet.