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Money On Mobile To Directly Raise $50M From Calpian

Mobile payment service provider My Mobile Payments Ltd (MMPL) which operates the mobile money service Money On Mobile has applied to the Foreign Investment Promotion Board (FIPB) to raise funding directly from Caplain Inc, as per an SEC filing.

Speaking to Medianama, MMPL managing director Shashank Joshi told that they plan to raise a total $50 million investment, of which they will receive $10 million now and the remaining $40 million in the first quarter next year.

Calpian’s investment in DPPL: Remember that Calpian had previously invested in MMPL, by investing in a newly formed company DPPL (Digital Payments Processing Limited), which in turn had entered into a service agreement with MMPL in April 2012. The company had then committed a $9.7 million cash investment and 6.1 million shares (6,123,077 shares) in common stock, which seems to have now increased to $10.8 million cash and 6.1 million shares. (More on the funding structure here). Joshi however said that this is a separate investment and will continue as per schedule.

Joshi said that FIPB’s approval is necessary for this investment, because MMPL manages consumer funds and is therefore licensed and regulated by the Reserve Bank of India (RBI). They had applied for FIPB’s approval in the first week of August 2013 and are still awaiting for their response, which is expected in the next few weeks. The company plans to use the investment raised to implement new payment options in the service, although Joshi declined to share more information on this.

Few other points worth noting from the SEC filing:

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– The average transaction size for Money On Mobile seems to be just below Rs 80 while the revenue volume per unique user seems to be around Rs 100.

Money On Mobile Per User Stats

– For utility bill payments, Money on Mobile receives Rs 2-5 per transaction regardless of size for both B2B transactions (i.e. through retailers) and B2C transactions (i.e. through consumers directly).

– Money On Mobile has 15 telcos and 6 DTH providers on board.

– Money On Mobile currently generates most of its revenues from the average 5% discounts that telcos and DTH players provide to bulk airtime buyers. It provides 2.25% of its airtime sales revenue to area distributors, 2.25% to store retailers and retains 0.5% of processed volume for itself. The company expects this margin to go up to 1% or higher as airtime purchase volume increases, thereby increasing the discount percentage.

– As indicated by the graph below, Money on Mobile seems to generate around 70% of its revenues from mobile airtime recharge service, while DTH airtime recharge service accounts for less than 30% of its revenues and only a small percentage seems to come from other services.

Money on Mobile Revenue Source

Calpian Investment: As stated earlier, Calpian has invested $7.36 million investment and issued 3.66 million shares (3,661,540 shares) of its common stock into DPPL. What’s worth noting though is Calpian mentions that 1.26 million shares (1,260,000 shares) of these shares are fully vested and non-reclaimable while the remaining 2.4 million shares (2,401,540 shares) are subject to being reclaimed if a certain percentage of profit goals are not met by fifth year of the business plan.

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Also readMoney On Mobile Claims To Have 67.5M Users As Of Aug 2013; Financials

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