Exclusive: Not lured by e-commerce, Indian e-wallet firm MobiKwik sharpens focus on fintech

Upasana Taku, Co-founder, Mobikwik

Gurgaon-based mobile wallet firm Mobikwik is focussed on expanding its play in the pure fintech space even as its rivals are betting big on e-commerce in a move to diversify their revenue streams.

Mobikwik is confident this strategy would lead it to the profitability path as early as by the year-end.

“Unlike our rivals who run marketplaces, we have always had more belief in the fintech space. It is our only business. Hence, any plans to diversify would revolve only around fintech,” co-founder Upasna Taku told DEALSTREETASIA in an interview.

To enhance its presence in the fintech space, MobiKwik is also open to inorganic growth through acquisitions, Taku said.

One97-promoted Paytm, which is the market leader in the e-wallet space, posted a loss of Rs 372 crore ($56 million) in the fiscal ended March 2015, compared to a profit of over Rs 5 crore ($750,000) the year before, according to a Times of India reportas a result of  its entry in the e-commerce space.

Expanding on its financial services offerings, Mobikwik is preparing to launch micro-credit service through which it will disburse small loans and earn interest on repayments. It has also built a product that allows companies to reimburse phone, data card, and other bills directly into their employees’ MobiKwik wallet. The company has rolled out the programme internally, where all of its 250 employees get reimbursements directly added to their MobiKwik wallet.

“The focus is on monetizing our existing properties and building new revenue streams,” Taku said. “We believe these products would contribute to us making profits in 2017.”

MobiKwik claims to have 30 million users and network of 50,000 merchants. In April, it had raised $25 million via Series B funding and it counts Tree Line Asia, Cisco Investment, American Express and Sequoia Capital among its investors.

While Taku declined to comment on MobiKwik’s fund raising plans, media reports suggest that the company is in talks to raise $40 million more to enhance its user base and launch more financial services products.

According to a report by Financial Express, MobiKwik’s losses widened almost six times to Rs 41.5 crore (around $6 million)  in FY15 from Rs 6.4 crore (around $1 million) in the previous year. The company generated income worth Rs 14 crore (around $2 million) during the period, which is up almost three times from Rs 5.1 crore ($770,000) registered in FY14.

MobiKwik is also ready to launch its payments bank, which is a stripped down version of a traditional bank. It is awaiting the Reserve Bank approval to kickstart its payments bank operations.

“Post announcing the first set of payments bank licenses in August 2015, we are waiting for the RBI to issue a fresh batch. When that would happen is something that the Reserve Bank of India is best placed to answer. As far as we are concerned, we are ready,” said Taku.

Meanwhile, Paytm, which already bagged the licence, intends to invest Rs 1,200 crore the first three years to set up 20 branches, 200 smaller branches, and take on at least 1,000 agents.

According to TechSci Research report, the mobile wallet market in India is projected to reach $6.6 billion by 2020, and everyone is trying to grab a piece of this pie.

Apart from other e-wallet companies like Oxigen and Citrus Pay, competition has been heating up in the Indian digital wallet space with large e-commerce players like Flipkart and Amazon wanting to enter this space. Cab-hailing service Ola recently entered the third-party mobile payments space with the launch of Ola Money, a move that will put Ola in direct competition with Paytm and Snapdeal-owned Freecharge.

Talking about the increasing competition in this space, Taku says “For mobile wallets to claim any success they need to have two critical components working in tandem: a) have an extensive network of partner merchants accepting wallet payments, b) millions of users paying across those merchant stores.”

Last year, MobiKwik ventured out in the offline space and activated mobile payments for brick-and-mortar stores such as Big Bazaar and Domino’s Pizza. The company claims to have over 10,000 retail stores, cafes, restaurants, etc accept MobiKwik payments. “This year we expect to grow our offline network to include over 200,000 stores,” said Taku.

Also Read:

India: MobiKwik partners IRCTC to offer payment option on Android app

Tree Line Asia leads $25m Series B round in One MobiKwik

India Dealbook: Mobile wallet firm Mobikwik, budget carrier Air Costa to raise funding

(Disclosure: Paytm’s Vijay Shekhar Sharma is an investor in DSA in his personal capacity.)

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

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Following vacancies can be applied for (only in Singapore).   

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.