‘Iron Man’ Vijay Shekhar Sharma put his own money on the line to launch Paytm — and ten years later the company is ready to go public
Vijay Shekhar Sharmahad to sell 40% of his company for ₹8 lakh, after his partners left him bankrupt.
- The company, One 97 Communications, is now the parent company of soon-to-go public Paytm.
- The Paytm founder always wanted to start a band that sings in Sanskrit, a language that he studied in school.
AdvertisementVijay Shekhar Sharma is not a man to be trifled with and he’s proven that time and again with the success of his startup, Paytm.
Right now, this Indian billionaire is one of the highest paid heads of a ‘unicorn’ in India. The man draws a ₹4 crore compensation annually, according to a filing with the Ministry of Corporate Affairs. A unicorn — in startup parlance — is a private firm valued at $1 billion or more. At the centre of his success is the digital payments provider, Paytm.
What many don’t know about Sharma, who pegs himself to be a ‘common man’, is that he was a child prodigy clearing his higher secondary education at the mere age of 14. But tough challenges lay ahead as he left his hometown near Aligarh, in Uttar Pradesh.
What follows is a story of betrayal, redemption and perseverance. His first business went under, and when the ‘Iron Man’ of India’s startup world wanted to launch Paytm, he had to put his own money on the line. After that, there was no looking back.
From 2011 to 2017, within a span of six years, Sharma became the the youngest billionaire in the country with a net worth of $1.3 billion. As of April 2021, his net worth stands at a whopping $2.3 billion.
I think that men and boys are different because the boys flip and sell. Men run and build legacies.”
Sharma kept getting knocked down, but he never stayed down
In college, Sharma faced a difficult transition with English not being his strong suit. “I taught myself English by memorising rock songs and simultaneously reading translated textbooks in English and Hindi,” he said in an interview with Bloomberg.
AdvertisementAmid the rigours of being in an engineering college in Delhi, Sharma used his spare time to build. He told Business Insider that he initially wanted to go to Stanford University, because that is where internet giant Yahoo was conceived, but realised that his financial resources would not allow it.
And, for a second time away from home, he took it upon himself to learn a new skill — coding. His friends and he took on the task of building a content management system (CMS), but the storm clouds were gathering.
He quit his job at a multinational to focus on business and set One 97 Communications in 2001 with the money he had made from his job. What he didn’t realise is that his partners would leave him bankrupt shortly after the first round of funding. He was eventually formed to sell 40% of his company for ₹8 lakh.
But Sharma was resilient. One 97 Communications, now the parent company of Paytm, experimented in the space of content, advertising and commerce. It wasn’t until a decade later that Sharma got the idea to enter the digital payments ecosystem.
Paytm comes to life
To put his money where his mouth is, Sharma put up 1% of his equity as collateral — worth around $2 million in 2011. And, with that, the first avatar of Paytm was born.
“Some other entrepreneur would have sold the equity and started their own company. But I aspire to build a 100 year old company,” the billionaire told Business Insider India in a 2016 interview.
Paytm entered the market at an opportune time. Mobile devices were getting less expensive, access to the internet was getting cheaper and everyone wanted to be online.
Sharma kicked off Paytm as a prepaid mobile and direct-to-home (DTH) recharge platform. In 2013, the company added data card, post-paid mobile, and landline bill payments to its list of services.
But the big change came a year later, in 2014, when the Paytm Wallet was launched. Ride-hailing app Uber and the Indian Railways even listed it as a payment option on their platforms.
The company went steamrolling ahead at full speed, adding more use-cases to its roster. In 2017, Paytm became India’s first payment app to cross over 100 million app downloads.
It wasn’t all smooth sailing, though. Paytm’s popularity came at a cost. While more and more people were signing on, the company was also making headlines as users took advantage of its services to conduct scams and frauds.
What lies ahead for Vijay Shekhar Sharma and Paytm?
Sharma’s debut on the Forbes Billionaires List in 2017 happened just a few months after India's massive demonetisation exercise. It put a sudden halt on cash payments, which led to a boost for digital payments. And, as a result, Paytm gained ground.
In April 2018, Paytm was in the spotlight again with China’s Alibaba Group and Japan’s SoftBank Group investing $453 million in Paytm Mall. In August, Paytm got another infusion of capital with Warren Buffet’s Berkshire Hathaway announcing a $300 million investment.
Sharma’s net worth has continued to increase even as Paytm has suffered losses.
The Paytm founder always wanted to start a band that sings in Sanskrit, a language that he studied in school. However, with the company set to launch its IPO soon and Sharma at the helm of a big change — it’s unlikely that he’s going to find the time anytime soon.
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