** India’s tech industry suffered a major blow as one of the largest Indian fintech companies, Paytm is failing due to mismanagement and lack of regulatory**

Indian startup, Paytm specializes in financial services, based in Noida, India. The company began in 2010 to bring Indian people into the mainstream economy.

Paytm fell into a controversy in March 2022, the Reserve Bank of India ordered the company to halt inducing new customers immediately.

On February 26, it was confirmed by the parent company of Paytm, One97 Communications that Paytm’s CEO and founder, Vijay Shekhar Sharma had resigned. The company gained profits during the pandemic as online shopping soared.

SoftBank, Alibaba Group, and Ant Financial were the enormous bets on the company that resulted in the stock prices declining in 2021. Reports claimed that SoftBank and Ant Financial cut their stakes in the company immediately after the pandemic was over.

Starting in March, the fintech company was not permitted to accept new deposits in digital wallets and accounts.

“Venture capital investors and founders have a greater responsibility to make sure that governance in the company is sound,” said Ashish Wadhwani, co-founder and managing partner of IvyCap Ventures.

According to the data of the global startup platform, Tracxn, venture funding was elevated, however, this dried up in 2023.

On March 7, there was a regulatory crackdown on Paytm that resulted in a decrease in valuation to $3 billion which is a sharp decline.

“There is no doubt that valuations were very stretched in 2021, early 2022,” said Wadhwani from IvyCap Ventures.

“Companies that don’t have a sustainable model are obviously going to go out of business because no one is going to fund them at crazy valuations,” he added.