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Paytm achieves profitability at contribution level with $100 billion GTV

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Paytm, an ace unicorn startup and digital payments platform, on Monday, said that it has achieved profitability at the contribution level, reported Inc42.

Vikas Garg, deputy CFO, Paytm said that the company’s contribution margin has grown from a loss of 30 per cent to profit of 12 per cent of the revenue.

Paytm further said that it defines contribution margin as revenue minus all direct costs incurred in providing services to customers.

These costs include payment gateway, marketing expenses, promotional cashback and all kinds of charges/commissions paid by the company, it added.

Recently, Paytm roped-in several top-level employees from Google, Goldman Sachs in the company with an aim to focus on monetisation opportunities and in a bid to expand further.

For details, read: Paytm takes onboard senior leaders from Google, Goldman Sachs; to focus on monetisation ambit

Garg also said that the company has recorded a gross transaction value (GTV) of $100 billion, up from GTV of over $50 billion, while clocking 5.5 billion transactions in FY19.

Revealing Paytm’s growth statistics for this year, Garg stated that the company has seen 15% quarter-on-quarter growth for FY20.

Garg also said that in the last two quarters, the company has seen over a 10% reduction in total costs. He added that focus on the merchant payments have given the company lower costs and higher revenue growth.

Garg further said that the Q-o-Q growth of the group, including all its subsidiaries, is much higher than 15% of One 97 Communications. “Further, the last financial year was a year of significant expansion of the payments business which is a very low margin business,” Garg explained.

Based out of Noida, Paytm was founded in 2010 by Vijay Shekhar Sharma with an aim to bring an ease in the digital payments ecosystem across India.

The company had recently said that it has allocated INR 750 Cr to expand its monthly active users. The platform planned on targeting 250 Mn new customers, and onboard new merchants in Tier 2 and Tier 3 cities and towns.

In the growing line of Paytm, othe emerging startups under the similar roof include FircentLenDenClubIndiaMoneyMartMonexoLoanBabaCapZest, and i2iFunding.

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