Delhi-based fintech firm MyMoneyMantra has raised as much as Rs 104 crore (about $15 million) from European investment company IFSD BV and newly-formed PE firm Vaalon Capital in what seems to be the first tranche of funding for the 30-year-old company.
The exact quantum of stake divested could not be ascertained but sources close to the development pegged it at 25-30 per cent, which puts the valuation of the company at over Rs 346 crore.
“So far, we have used our internal accruals to fund our growth as we believe in the prudent use of capital against a capital-funded high burn growth strategy,” Raj Khosla, MD and CEO at MyMoneyMantra, told DealStreetAsia in an interaction.
“But the business environment has changed over the last five years with rapid adoption of technology by manufacturers, distributors, and even consumers. That is giving rise to funding requirements now,” added Khosla.
Going forward, MyMoneyMantra plans to use the capital raised to accelerate growth through technological adoption. Besides, the company also plans to allocate a part of the funding for acquisitions as it gears up to expand its operations pan India. “We see a lot of inorganic opportunities coming up in the fintech sector… We are absolutely open to acquisitions for which funding is critical,” said Khosla, a chartered accountant who worked overseas with KPMG before returning to India to launch his entrepreneurial journey.
Khosla founded the company with a corpus of Rs 1,000 in 1989 after spotting the need for providing professional financial services to the increasing number of middle-class, self-employed people and businesses. In the initial years to 2008, MyMoneyMantra worked as an exclusive distributor for multiple products for Citibank. It clinched tie-ups with multiple banks and NBFCs after 2008.
For the year ended March 31, 2019, MyMoneyMantra clocked revenues of about Rs 135 crore. So far, the company that counts Andromeda and BankBazaar as its key competitors claims to have served 2.5 million customers across 50 cities across the country. Today, it has tie-ups with over 90 financial institutions such as banks, NBFCs and insurance companies.
Khosla said the financial services market is currently facing challenges pertaining to market liquidity and rapidly changing technology with regards to distribution and consumption by the consumer. The opportunity lies in using a business model that combines physical touchpoints with digital, he added.
The fintech sector is increasingly evincing investor interest. Currently, the market in India is dominated by US-based accelerators and venture capital firms such as Kalaari Capital, Sequoia Capital, Saif Partners, Accel Partners, Omidyar Network and Tiger Global, among others.
For IFSD BV, a Dutch investment company based in Rotterdam, the current transaction marks its maiden investment in India. Vaalon, on the other hand, is an independent PE and advisory firm founded in 2016 that is focused on making long-term investments in India. Its investment ticket size ranges between $15 million and $75 million.