US-based electronic processing company Calpian Inc has raised $1 million from the Hall Financial group founder & chairman Craig Hall, who has committed a total investment of $5 million into the company.
Calpian said it will be using this investment to fund its India-based mobile payment subsidiary Money-on-Mobile along with its US growth initiatives. Money on Mobile CEO Shashank Joshi mentions that Hall will also be advising the company on financial matters for three years.
In addition to this, Calpian has also raised growth funding from a group of Silicon Valley executives led by Babu Vinod Sivadasan, Executive Vice President (Engineering) at Envestnet Asset Management last month. While the company didn’t disclose the investment size, it termed this investment as a ‘significant investment’ and said this will be used to fund the growth of Money-On-Mobile.
Remember that My Mobile Payments Ltd (MMPL) which operates the mobile money service Money On Mobile, had earlier mentioned plans of raising a total $50 million investment from Calpian and had applied for FIPB’s approval in the first week of August 2013. This includes an initial investment of $10 million and an expected $40 million investment later this year. In November 2013, FIPB had directed MMPL to raise Rs 58.91 crore (around $9.46 million then) through the automatic route.
DPPL Investment: Note that this investment is different from Calpian’s earlier indirect investment in MMPL. In April 2012, Calpian had invested in the company, by investing in a newly formed company DPPL (Digital Payments Processing Limited), which in turn had entered into a service agreement with MMPL. The company had then committed a $9.7 million cash investment and 6.1 million shares (6,123,077 shares) in common stock, and had later increased it to $10.8 million cash and 6.1 million shares in September 2013 (More on the funding structure here).
As of September 30, 2013, Calpian has invested $8.7 million into DPPL, issued 3.7 million shares of its stock valued at $5.5 million and recognized a cumulative $3.6 million equity investment and currency translation losses in return for 65% stake in the company. This also includes advances made by the company which has not yet been certified by DPPL.
Money On Mobile User Base
As of February 2014, Money-On-Mobile claims to have 3.68 million (3,679,810) monthly active users, marginally down on a monthly basis. Overall, it claims to have more than 84.3 million (84,265,631) phone number customers and the service is now supported by 1.79 lakh locations (1,79,292 locations).
The processed transaction volume was marginally higher on a monthly basis to Rs 68.23 crore (Rs 68,23,20,109) while the total number of transactions declined marginally to 8.9 million (8,876,679) transactions.
The average transaction size for Money On Mobile seems to be just below Rs 80 while the revenue volume per monthly unique user seems to be around Rs 185. Its worth noting that the revenue volume per monthly unique user has grown significantly for the last three months (Nov 2013- Feb 2014)
The company offers services like mobile topup and DTH recharge. Last September, it had mentioned that mobile recharge accounts for around 70% of its revenues, while DTH airtime recharge service accounts for around 26%-27% of its revenues. In the following month, it had introduced utility payments with five Indian utility providers including Bihar Electricity Bill Payment, Reliance Energy Bill Payment, BEST Electricity Bill Payment, Mahanagar Gas Limited and Tikona Bill Payment.
Money On Mobile competes with Airtel Money, Vodafone’s M-Pesa, Tata DOCOMO’s mRupee, Beam Money, Paymate and Zipcash among others. Idea Cellular had received a mobile wallet license in December 2013 while Reliance Industries had received a mobile wallet license in November 2013 for a prepaid payment instrument called ‘Jio Money’.