A tale of two valuations: The Paytm stock in the era of PhonePe

A tale of two valuations: The Paytm stock in the era of PhonePe — From left, Sameer Nigam, cofounder and CEO, PhonePe; Vijay Shekhar Sharma, founder and CEO, Paytm

Synopsis

Is PhonePe’s 3x valuation over its competitor Paytm justified? The vintage and monetisation strategies of both payments players are quite different and PhonePe investors are hoping that the company can do everything better than Paytm at thrice the scale.

13 mins read, Last Updated:
Jan 24, 2023, 10:48:25 AM IST

Last weekend, everyone on the corridors of the Indian fintech world was busy discussing one topic – PhonePe’s USD350 million fundraise at a USD12 billion pre-money valuation. This was the first tranche of a billion-dollar funding round, with a large part coming from its parent, US retail behemoth Walmart. But how can PhonePe command a 3x valuation over its competitor Paytm even though the latter is far ahead in terms of monetising its user base?

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