Participated · Equity · Jul 2019

MobiKwik is a Gurugram-based fintech that offers digital payments and financial-services products. The company has filed a draft red herring prospectus (DRHP) seeking to raise Rs 700 crore in an initial public offering, which is its second attempt to go public. Per the DRHP, it intends to use Rs 250 crore for financial services, Rs 135 crore to bolster product and technology, and Rs 135 crore to expand its payment services business. In H1 FY24 MobiKwik reported a profit of Rs 9.5 crore on operating revenue of Rs 381 crore. For FY23 the company reported operating revenue of Rs 539 crore (a 2.37% increase) and a loss of Rs 83.8 crore, down 34% from Rs 128 crore the prior fiscal. The company has received multiple debt financings from the same investor over the past two years. MobiKwik offers digital payments and financial-product services and processes consumer payments, bill payments and financial products. The company reports processing over a million transactions daily, including about 3,000 insurance policies per day; consumer payments account for roughly 60% of volume. Management says it is shifting from capital-intensive growth toward profitability and has forecasted an IPO within the next two years, with plans to raise $50 million before listing. MobiKwik expects revenues of Rs 480 crore by March 2020. To date the company has raised about $118 million from investors including Sequoia Capital, American Express, and Cisco Investments, and in 2017 secured Rs 225 crore from Bajaj Finserv. MobiKwik operates a mobile wallet app that facilitates digital payments for consumers and merchants across India. The company claims about 32 million users and works with roughly 100,000 merchant partners today. MobiKwik competes with players such as Paytm and FreeCharge and counts backers including Sequoia, GMO, MediaTek, Cisco and American Express. Management has set an aggressive growth target of 150 million users and 500,000 merchants over the next three years. The product roadmap includes integrations that expand payment acceptance and features for online and offline transactions, such as virtual-card capabilities being introduced through partners. To date the company has raised over $120 million, including its most recent financings. MobiKwik operates a large independent mobile payments network that enables users to load money into a wallet via cash, loyalty points, debit and credit cards, and netbanking for online and offline purchases. The platform supports use cases including recharge, bill payments, food, grocery, travel and cabs, shopping and entertainment, and peer transfers to wallets and bank accounts. Its services run on Android, Windows, iOS and MobiKwik.com and connect 28 million users with 50,000 retailers, including partners such as IRCTC, Uber, Big Bazaar, Zomato and MakeMyTrip. The company had previously raised close to $30M from investors including Sequoia Capital, American Express, Tree Line Asia and Cisco Investments. MobiKwik aims to expand reach to 150 million Indians and facilitate $5 billion in digital payments to 500,000 retailers. In the latest development the company secured a $50M funding round from multiple strategic and VC backers. MobiKwik provides a mobile payments wallet and a national merchant network that enables customers to load funds and pay in person. The company claims over 15 million registered wallet users and a network of more than 100,000 merchants. It is pursuing offline retail distribution to expand reach where smartphone penetration and bank access remain limited. MobiKwik has applied for a payment-banking permit and says it intends to use mobile technology to extend financial services to underserved customers. The startup is targeting significant user growth (a stated goal of 100 million users by the end of next year) as it overlaps increasingly with traditional banking and telecom mobile-banking initiatives.