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Paytm’s shares fell by nearly 20% on Monday after the company said it would sell its e-commerce business to Flipkart.

Shares in Paytm, India’s largest digital payments company, fell by almost 20% on Monday after the company announced that it would sell its e-commerce business to Flipkart. The deal will see Paytm receive $2 billion from Flipkart, and will also see the two companies enter into a strategic partnership. While this deal may seem like a good one for Paytm, some are worried about what it means for the future of India’s biggest online marketplace.

What is Paytm?

Paytm is an Indian digital payments company that allows users to make online and offline payments using their mobile phones. Founded in 2010 by Vijay Shekhar Sharma, Paytm has become one of India’s most popular apps with over 200 million users. In 2018, Alibaba Group Holding invested $200 million in Paytm as part of a deal that saw Ant Financial Services Group gain a majority stake in the company.

Why did Paytm sell its e-commerce business?

Paytm Mall, which was launched in 2017, allowed users to shop from over 100 brands on its platform including Amazon and Big Bazaar. It also allowed users to pay using their Paytm wallets or debit cards linked to their accounts.

Paytmmall, which has been valued at $1 billion according to Economic Times, had raised more than $200 million from investors including SoftBank Group Corp., Ant Financial Services Group and Alibaba Group Holding Ltd., but hadn’t yet turned a profit despite growing at breakneck speed.