Have Paytm and Byju's debacles dented Indian startups' prospects? Experts weigh in
Paytm and Byju's, have sparked discussions on the evolution of the start-up and entrepreneurship landscape in India. Touted as the beacons of India's burgeoning unicorn ecosystem, the seeming crash of mighty multi-billion dollar Byju's and Paytm Payments Bank has shaken the edtech and fintech start-up spaces in particular. For the uninitiated, Paytm's fintech arm Paytm Payments Bank (PPBL) has been hit with harsh regulatory limits by the Reserve Bank of India (RBI) --- limits that essentially shut down the whole operation.
The central bank said the move came as PPBL repeatedly failed to comply with banking norms and KYC requirements. Notably, however, the company's internally formed advisory committee is yet to begin deeper conversations to identify any issue, as per panel head M Damodaran. Byju's on the other hand has been rocked with money laundering accusations against founder-CEO Byju Raveendran and belligerent investors intent on ousting him from the company.
Raveendran is also battling Enforcement Directorate (ED) accusations related to the Foreign Exchange Management Act (FEMA), which he has denied. Once worth billions, the company's valuations have tanked abysmally compared to its glory days, with seemingly no respite close ahead. Amid the uncertainty, we asked industry stakeholders to weigh in on the impact of these setbacks and share insights on the future trajectory of the start-up space in India.
BharatPe's Ashneer Grover acknowledged Paytm's pioneering role in India's fintech landscape, calling it the 'father of fintech' space in the country. Grover said that while he founded BharatPe, the company does owe its existence to Paytm. "Paytm is the father of all fintechs in India.
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