Tech
India orders Paytm Payments Bank to halt business
The Reserve Bank of India (RBI) widened its curbs on Paytm’s Payments Bank, which processes transactions for financial services giant Paytm, barring it from offering many banking services, including accepting fresh deposits and credit transactions across its services.
Wednesday’s move, which goes into effect February 29, follows the Indian central bank ordering Paytm Payments Bank to stop accepting new customer accounts in 2022, a curb it maintains. RBI said a comprehensive audit by external auditors found “persistent” noncompliances and “continued material supervisory concerns” in the bank. The noncompliance, RBI said, warranted “further supervisory action.”
The full extent of RBI’s new direction remains unclear for now, but industry executives cautioned that it could severely disrupt Paytm’s offline merchant business as well as the gateway business. RBI’s new directive “for all practical purposes . . . ends the operations of Paytm Payments Bank,” Bernstein analysts wrote in a note. “This is a definite negative development and adds to the already heavy regulatory overhang on the business.”
One97 Communications, the parent firm of Paytm, owns a 49% stake in Payment Payments Bank. A payments bank license allows the holder to offer a number of banking services, though some restrictions are in place.
The RBI also directed One97 Communications and Paytm Payments Services to terminate their nodal accounts “at the earliest.” Without the nodal account, Paytm will likely have to move many of its businesses to other banks, according to preliminary assessment by industry executives.
“Settlement of all pipeline transactions and nodal accounts (in respect of all transactions initiated on or before February 29, 2024) shall be completed by March 15, 2024 and no further transactions shall be permitted thereafter,” RBI added.
Customers can continue to withdraw and utilize money from their accounts, RBI said. Paytm Payments Bank will also not be allowed to offer credit transactions, including via wallets, RBI said.
In 2022, RBI slapped Paytm Payments Bank with penalties after finding that the Noida-headquartered firm had violated rules by allowing data to flow to servers outside of India and didn’t properly verify its customers.
Tech
Chainalysis permanently parts ways with its founding CEO
Michael Gronager, the co-founder and longtime CEO of Chainalysis, has agreed to leave the company permanently, two months after taking a temporary personal leave of absence.
Chainalysis, a buzzy 10-year-old, New York-based blockchain data platform, will now be led by co-founder Jonathan Levin, as Levin told TechCrunch, explaining that on Tuesday, its board of directors gave him Gronager’s job. But Levin, who has long served as the outfit’s chief strategy officer, will do more than run the company as CEO; he will also maintain his other roles.
“I’ve been running R&D, and I think the CEO should be the chief product officer, so I’m making no changes to our R&D leadership team; it will continue to report directly to me,” he said in an interview on Wednesday.
Levin declined to provide more information about Gronager other than to say that Gronager is also no longer on the Chainalysis board but retains his equity in the company.
A message to Gronager on Wednesday from TechCrunch went unreturned.
Asked about Chainalysis’ financial health, Levin said the startup is “continuing to invest in our growth,” and that “we don’t need to raise capital. We raised $175 million in 2022 and [still] feel strong about the cash position of company.” He added that his focus will be on “executing, the expansion of our risk platform, and going deeper with our government clients across the world to ensure they can deal with the increased demand of crypto.”
Chainalysis, whose early investors include Benchmark, was valued by investors at $8.6 billion during that 2022 funding round. Crypto investor Katie Haun, who first discovered Chainalysis in her capacity as federal prosecutor, reportedly began buying up secondary shares of the company at a valuation of $2.5 billion this past April.
Considered a “crypto detective,” one whose clients include the U.S. government and a wide range of corporations, Chainalysis in late 2023 laid off slightly more than 15% of its staff of 900, with plans to focus more squarely on government contracting, according to The Block.
The entire crypto industry has been in bounce-back mode in more recent weeks, as the incoming Trump administration signals a far friendlier stance toward digital currencies. The most obvious proof point: The price of bitcoin reached a record high of $100,000 on Wednesday.
Above: Levin at a StrictlyVC event hosted by TechCrunch in November 2024.
Tech
Zopa, the UK neobank, snaps up $87M at a $1B+ valuation, eschewing the IPO route
Some believe Klarna’s planned IPO in 2025 could set the stage for other fintech startups to go public. But with the tech IPO market still sluggish, one of the candidates hotly tipped to follow suit has instead just announced a fundraise, and its CEO says going public is “not a priority.” Zopa, the U.K. neobank […]
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Tech
MobiKwik’s IPO will value it at $250M, 73% less than its last private valuation
MobiKwik, an Indian financial services startup, has cut the size of its planned IPO for the third time, setting a price band of ₹265 to ₹279 ($3.1 to $3.3) that values it at $250 million — down sharply from its last private valuation of $924 million in 2021.
The Gurugram-based fintech, backed by Peak XV and ADIA, is seeking to raise about $69 million in the IPO, well below the $255 million it initially targeted back in 2021. The IPO opens on December 11, and the stock will start trading on December 18.
The 15-year-old startup operates one of the most widely used mobile wallet apps in India. But it has struggled to maintain relevance after a government-backed protocol, UPI, saw broader adoption. The company has raised more than $268 million to date.
MobiKwik says it will use the proceeds from the IPO to fund its growth and to invest in AI. The startup serves 161 million users and 4.26 million merchants.
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