Paytm parent One97 exits Loginext, shrinks losses 42% in FY21

One 97 Communications, the parent entity of payments app Paytm, has exited its investment in logistics platform Loginext Solutions. The Vijay Shekhar Sharma founded fintech firm, which had invested $10 million in Loginext in 2015, sold its stake when Tiger Global Management and Steadview Capital led a $39 million funding round in the company in January this year. 

Paytm disclosed the Loginext exit in its annual report for the financial year 2020-21. 

Founded in 2014 by Dhruvil Sanghvi and Manisha Raisinghani, Fremont, California based LogiNext was valued at $100 million following the Tiger Global and Steadview investment round. At the time, Sanghvi had told TechCircle that a few early investors had exited as part of the round without specifying details.

The company works with 50 enterprise customers that contribute to a major share of the revenues. It also works with 100 SMBs, providing them with automated order management, predictive capacity planning, real-time route optimization, dispatch automation and analytics.

In its annual report, One 97 also said it borrowed Rs 500 crore and Rs 300 crore from ICICI Bank Limited in separate tranches through overdraft facilities during the financial year 2020-2021. This is in addition to Rs 1,400 crore in working capital that the company borrowed from the bank. 

One 97 Communications reported consolidated losses of Rs 1,701.01 crore for the financial year, a 42% dip from Rs 2,942.36 crore it had recorded in loss in FY 2019-20. 

One 97 Communications has 41 subsidiaries, joint ventures and associate companies. During the financial year, it altered the status of Paytm Insuretech Pvt Ltd and Paytm Financial Services Ltd from wholly owned subsidiaries to associate companies.  

The company’s board has also approved investments of Rs 90 crore in Paytm Insurance Broking, Rs 105 crore in Paytm Money and Rs 80.11 crore in Paytm First Games, through its wholly owned subsidiary Paytm Entertainment.

The company in its report noted, “The net worth of Paytm First Games Private Limited, a joint venture of the group, has been fully eroded with net current liabilities. The carrying value of the share of investment in the consolidated financial statements is reduced to 'Nil' as the group is not liable to contribute in excess of their contribution.”

According to media reports, Paytm is looking to float an initial public offering (IPO) of $3 billion which will value the company at $24 billion. The company is currently valued at $16 billion according to reports.