PayMate's Financial Crisis Deepens After Investor Fails to Deliver Funds
Mumbai-based B2B payments firm PayMate, backed by global giant Visa, has been plunged into a severe financial crisis after a key investor failed to transfer promised funds for over nine months. The company's founder and CEO, Ajay Adiseshann, confirmed to Mint that the firm has been forced to shut down its Middle East operations and is now urgently seeking to raise a fresh $20 million to stay afloat.
Operational Pivot and Mounting Losses
This development marks a dramatic reversal for PayMate, which earlier this year was "actively expanding" across international markets. Instead of growth, the company is now grappling with a perfect storm of problems: unpaid salaries stretching up to nine months, a wave of senior-level exits, and a stalled acquisition that was central to its growth strategy.
The root of the crisis is a long-delayed investment from London- and Middle East-focused Crimson Ventures. Despite signing a definitive agreement in March for a $30 million infusion, the fund has not transferred any money due to "internal issues at their end," according to Adiseshann. Unable to wait any longer, PayMate is now in discussions to close a new $20 million round by early December.
Employee Exodus and Unpaid Dues
The liquidity crunch has hit employees the hardest. Adiseshann confirmed that most staff have not received their full salaries for six to seven months. In some extreme cases, payments have been pending since February—close to nine months. This has taken a heavy toll, pushing many to leave.
The company has witnessed a significant exodus of talent. Senior executives who have resigned include Rajesh Khanna, Chief Commercial Officer for the UAE business; Pooja Chauhan, Vice President of HR; and Nanda Harish, the legal counsel. Former employees estimate that close to 50% of the workforce has either quit or been laid off in the last 8-10 months, with remuneration still pending for most.
Adiseshann has stated that the company expects to clear all outstanding dues for current and former employees once the new funding round is successfully closed.
Strategic Shifts and Stalled IPO Ambitions
In response to the crisis, PayMate has shut down its underperforming UAE business, which was once a key geography and one of its biggest markets. The company is now redirecting its focus to the Asia-Pacific region. This is the firm's second major pivot, having previously shifted from a domestic focus to global expansion in the face of tighter regulations at home in India.
The funding uncertainty has also impacted PayMate's long-term ambitions. The company had withdrawn its ₹1,500 crore IPO proposal in 2023 after the regulator returned its draft prospectus. While it still hopes to revive listing plans in FY26, the current operational strain makes this timeline uncertain.
Financially, the company reported revenue from operations of $162 million in FY24, marginally lower than the $163 million in FY23. Its net loss widened to $5.7 million in FY24 from $4.4 million the year prior.
Critical Acquisition in Limbo
The delayed funding has also put a crucial acquisition on hold. PayMate's planned takeover of Indonesian fintech DigiAsia is seen as vital for stabilising revenue. Adiseshann claims that despite the delays, the acquisition, structured as a stock-swap, remains on track. DigiAsia is preparing for a delisting announced in September.
"Once this round closes, we will complete our DigiAsia acquisition. This will help us acquire customers, stabilise revenue and return to normal operations," said Adiseshann. He added that Australia and New Zealand continue to perform well, and Indonesia is expected to become a key market post-acquisition.
Founded in 2006, PayMate has raised around $70 million from investors including Visa, Lightbox, and Mayfield Fund. If the new $20 million round closes, it will be the company's first major capital raise since its aborted IPO attempt in 2022.
