Amidst crisis, will Paytm's acquisition of Bitsila, an ONDC startup, prove successful?

Amid regulatory challenges facing Paytm's payment services, the fintech giant is reportedly finalizing a deal to acquire Bitsila, an interoperable e-commerce startup, aiming to broaden its reach among merchants.

Bitsila, ranked as the third largest seller-side platform on the Open Network for Digital Commerce (ONDC), is poised to be acquired by Paytm in an advanced stage deal expected to conclude soon, sources familiar with the matter revealed.

While specifics regarding the deal size and structure remain undisclosed, Bitsila, established in 2020 by Dasharatham Bitla and Sooryah Pokkali, has garnered attention for facilitating small merchant onboarding to the ONDC network.

This potential acquisition aligns with Paytm's strategic vision to strengthen its presence within ONDC, complementing its existing role as a buyer app integrated with the network since 2022.

The move comes amidst regulatory scrutiny faced by Paytm, including concerns over foreign exchange compliance and KYC lapses, prompting a market reaction with the company's shares falling by 10 percent.

With ambitions to onboard 10 million merchants to ONDC by 2025, as stated by Paytm's founder Vijay Shekhar Sharma, the acquisition of Bitsila underscores Paytm's commitment to harnessing the potential of ONDC and expanding its footprint in the e-commerce landscape.