Paytm set to acquire Bengaluru-based ONDC start-up Bitsila: Here's why
What's the story
Paytm, which is battling multiple regulatory challenges, is close to acquiring Bengaluru-based e-commerce start-up Bitsila. Bitsila, co-founded by Dasharatham Bitla and Sooryah Pokkali in 2020, ranks third in transactions on the Open Network for Digital Commerce (ONDC) among seller-side platforms. Sources informed CNBC that the acquisition could be finalized within the next week.
Expansion
Start-up acquisition to deepen Paytm's ONDC reach
This acquisition would allow Paytm to expand its presence on ONDC by tapping into the seller-side of the network. Already a buyer app on ONDC, Paytm was one of the first major companies to join the open network in 2022. A source stated, "It makes sense for Paytm to buy Bitsila as they get a tried and tested seller-side app ready-made." Paytm's CEO, Vijay Shekhar Sharma, previously announced plans to bring 10 million merchants onto ONDC by 2025.
Problems
ONDC's growth and Paytm's regulatory challenges
In January, ONDC reached a milestone of three million retail purchases in a single month, averaging over 100,000 transactions daily. The network also recorded 3.5 million mobility bookings during that month, totaling over 6.5 million transactions across all categories. Meanwhile, Paytm faces scrutiny from the Reserve Bank of India (RBI) over issues such as foreign exchange violations and know-your-customer (KYC) lapses. The RBI's investigation reportedly uncovered significant KYC irregularities, posing serious risks to customers, depositors, and wallet holders.
Stock
A look at Paytm's stock prices
Today, on the National Stock Exchange (NSE), Paytm opened at Rs. 420 per share. It is currently trading at Rs. 420.60 apiece (down 5.83% compared to yesterday). Meanwhile, on the Bombay Stock Exchange (BSE), it opened at Rs. 416.35 and now trades at Rs. 420 (down 6.06% from the previous day).