Quick earnings snapshot: Nykaa's Q3 net profit doubled … Spotify's user base jumped to 602 million … Nazara Tech's Q3 profit jumped 47%.

In today’s newsletter:

• Vijay Shekhar Sharma's plan to salvage Paytm
• Tata's Neu frontier
• PhonePe expands board

P.S. One of India's biggest crime mysteries is becoming a docuseries. Scroll below for more deets!

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After the initial shock, Paytm founder Vijay Shekhar Sharma is chalking out a plan to salvage the operations of the fintech major.

Sharma led a group of executives to meet Reserve Bank of India officials yesterday to discuss the account migration process for the Paytm Payments Bank customers, people familiar with the matter told us.

• Regulators however don't seem keen on immediately saving Paytm's wallet business. Once the company's mainstay, wallets however now contribute only around 5% of the company's GMV. Read more

Also read: Banks await RBI green light before partnering with Paytm to take over merchant accounts

Sharma has also sought the help of his fellow entrepreneurs to push back against RBI's directives.

A group of founders including Bharat Matrimony's Murugavel Janakiraman, PB Fintech's Yashish Dahiya, MakeMyTrip's Rajesh Magow have written to Prime Minister Narendra Modi, Finance Minister Nirmala Sitharaman, and the RBI urging them to reconsider the recent sanctions, according to a letter seen by us. 

Some founders however have stayed back. At least four founders we spoke to said they opted to stay away as they saw this as a Paytm-specific issue and didn't want to rub the regulator the wrong way.

"The regulator (RBI) doesn't like to be backed into a corner", a unicorn founder who chose to abstain from being a signatory to the letter, told us.

Read our story

Paytm rivals PhonePe, BHIM and Google Pay are seeing a surge in app downloads as consumers look for alternative digital payment services. 

• PhonePe saw a 24.1% increase in its Android downloads for the four-day period of January 31-February 3 while the government-backed BHIM saw a 50 percent increase for the same period. 

In contrast, Paytm saw a nearly 5% decline in its Android downloads for the same period.

Go deeper

• Why have half of India’s payments banks shut shop?

• 5X jump in Paytm employees looking for jobs, ‘safe pastures’

• Paytm’s best option would be a representation to RBI, say legal experts

• Paytm mess likely to make industry cautious but big impact unlikely, say experts

• Paytm Payments Bank annual report shows board was confident RBI would validate corrective measures

• Jio Financial Services, Paytm deny reports of wallet business acquisition talks

President, Chief Business Officer, Chief Product Officer, Head of investments — these are some of the top dogs that have left Tata Digital, the consumer internet arm of the Tata Group, in the past 12-18 months.

Joining this list is its chief executive officer Pratik Pal who led the company since its inception.

• Naveen Tahilyani, who is currently the CEO of Tata AIA Life Insurance Company, will replace Pal on February 19.

Pavan Podila, chief software architect, and Samir Aksekar, chief information security officer, are also set to leave in the coming weeks.

Tata Digital not only houses the group’s acquired e-commerce apps like BigBasket and 1mg, but also operates its super app Tata Neu.

Meanwhile, the conglomerate’s super app — Tata Neu — is entering online food ordering by integrating with Open Network for Digital Commerce (ONDC).

• Sources tell us that closed-user group trials will start in a few days, but public availability is at least a month away

• The Tatas want to add food ordering to Neu in a serious way as it is a ‘high-frequency’ use case that will bring back consumers to the app regularly

The app might eventually be integrated with ONDC for other categories like fashion and home decor, depending on how consumers receive it, a person aware of the matter told us.

• Gaurav Porwal, a senior vice president at Tata Digital, is helming the project, say sources.

Although the Tata Group super app went live in April 2022 amid much fanfare, industry players said it has not lived up to the hype. 

• Some are of the view that it lacks the ‘move fast and break things’ culture of the internet world

• Others pointed out that the ‘super app’ idea was flawed to begin with as it has not worked anywhere outside China and Southeast Asia

Go deeper

The secret to success is preparation. The better prepared the company is, the more efficient and less costly the process can be. PhonePe knocked out another one on its to-do list.

Walmart-backed payments and financial services app PhonePe has expanded its board by appointing three new members, to strengthen governance and pave the way for a potential public listing in India.

• Former revenue secretary Tarun Bajaj, Walmart's Chief Financial Officer John D Rainey, and Chief People Officer Donna Morris have joined the company board, as per a regulatory filing seen by us.

With this, PhonePe’s board strength is beefed up to 8 members

The latest board additions fall within PhonePe's grand plans to expand business beyond payments and turn profitable, leading up to an IPO.

• It recently launched an e-commerce-focused app Pincode, an investment app for stocks and mutual funds called Share.Market, and is working its way towards consumer loans besides doubling down on smart speakers and merchant loans

In November, PhonePe rejigged top management and appointed four senior executives as CEOs of major business segments.

• The Bengaluru-based firm holds a coffer of $850 million funds raised last year to fuel its ambitious plans.

The move to fortify the board also comes at a time when its larger rival Paytm has been under fire for gaps in compliance and governance.

In such a case scenario, Bajaj’s entry on to the board holds significance. 

• The former revenue secretary has served on the boards of top banks and held directorship on the Central Board of the Reserve Bank of India (RBI) and the Board of SEBI.  
• Major fintechs like Razorpay, Cred, BharatPe, Slice have roped in banking veterans and retired civil servants to help them navigate choppy regulatory waters and strengthen compliance.

Read our story

The rapid rollout with the right incentive structure of the Rs 1 lakh crore ”Anushandhan Scheme” can make sure that India doesn’t just become a consumer of AI, but also a producer of AI, with associate higher share, writes Umakant Soni, co-founder of ARTPARK in a column for us.

For India to grow at a faster rate, the AI innovation ecosystem has to be revamped and a far higher share of the global economy in the lucrative sunrise sectors needs to be captured, he says. 

Read the column

• A look at how AI is helping researchers bring 2,000 year old scrolls back to life. Some of these scrolls could potentially ‘rewrite’ the history of key periods of the ancient world.

• The United Kingdom said it would spend more than 100 million pounds ($125 million) to launch nine new research hubs in AI and train regulators about the technology.

The murder of Sheena Bora in 2012 has been one of the country's biggest crime mysteries. A new docuseries looks to dig deep into her disappearance, the dysfunctional family dynamics and secrets surrounding her murder.

• The series, titled "The Indrani Mukerjea Story: Buried Truth", will feature interviews with Indrani Mukerjea, the mother of Sheena Bora, who spent six years in prison on alleged charges of murdering her daughter. She was released on bail in May 2022.

The docuseries will also feature her children Vidhie Mukherjea and Mikhail Bora as well as veteran lawyers. It is set to debut on Netflix on February 23.