Paytm Mall, the commerce arm of One97 Communications, is considering changing its base from Noida to Bengaluru according to two Entrackr sources. Two rounds of discussion have already happened at the senior level in the past three weeks, they added.
“Proposal for changing the company’s headquarters is currently underway and the management is expected to soon take a final call on this,” said one of the sources requesting anonymity. “Almost everyone in the meetings was more or less in favour of changing the base with a few turning against it because shifting the base would involve a lot of complexities, especially in the current situation.”
While Entrackr couldn’t immediately ascertain the reasoning behind shifting headquarters, sources say that this move could allow Paytm Mall to trim their employee headcount without actually having to terminate them. “If Paytm Mall takes a call to move to Bengaluru, many employees will not agree to change their location. This would disqualify the contracts between the company and employees naturally,” added the second source, requesting not to be named.
The discussion around relocating headquarters has come at a time when e-commerce companies are finding it hard to operate over the last eight weeks due to a nationwide lockdown. Paytm Mall saw its business plummet by over 80%. Experts say it could take several months from here to reach its pre-COVID-19 peak.
Meanwhile, relocation to Bengaluru will also give the company access to superior-tech talent for Paytm Mall and strengthen its operations in the southern part of India, added the sources cited above.
Shifting base to Bengaluru by startups across the country isn’t a new phenomenon. Many companies including Ola have moved to the silicon valley of India so that they could hire sharp engineers to build superior products. However, none of the consumer-facing unicorns has changed its base in the last few years.
Paytm Mall has declined to comment in response to Entrackr’s detailed questionnaire.
It’s worth noting that Paytm has a strong tech team in Bengaluru and Paytm Money — One97’s wealth management subsidiary.
Paytm Money has also been grappling with the problem of exits at the top-level. Its Chief Executive Officer Pravin Jadhav resigned from the company last month while chief technology officer and the operations head are also serving their notice period.
Entrackr had exclusively reported the resignations of Jadhav, Suresh Vasudevan and Beejish Pillai.
Paytm Mall had raised $160 million from eBay at a valuation of about $3 billion. Following the investment from eBay, the company also separated all functions from its holding company One97 Communications in August last year.
Paytm Mall’s operating revenue increased by 20% to Rs 892.77 crore in FY19 from Rs 744.15 crore in FY18. Around 86% of total revenue Rs 767 crore came from providing marketing and payment gateway services to sellers. The company also tightened its purse strings during the period as the total expenditure controlled by 17.11% while losses were reduced by 34.5% to Rs 1,171.44 crore.