digital-payments-cmn

MoneyOnMobile, formerly known as Calpian Inc, has reported revenues of $1.4 million for the quarter ended June 30 (Q1 2017). This represents a growth of 10.69% from $1.27 million from the same quarter last year. The company processed $224 million in the quarter compared to $108 million in the same period last year, a growth of 108%.

Over the last 12 months, MoneyOnMobile has processed payments worth $845 million, CEO Harold Montgomery said in a call with analysts. “The main growth driver in this processing volume increase was domestic remittances,” he added.

MoneyOnMobile says that it has served 182 million mobile users till date and has 319,292 retail stores on its retail payment network.

MoneyOnMobile’s primary business is money transfer within India, but like other offline digital wallet players, including Oxigen, the money is also used for purchasing tickets and paying bills: Consumers deposit cash with one of its agents at a retail location, and it gets deposited into a wallet. Then an agent can use that money to pay bills or transfer the money to a designated user elsewhere, using only the mobile phone and SMS text messages.

Calpian was launched in 2011 to buy credit card processing assets, invested in MoneyOnMobile in 2012. But earlier in 2016, it sold its credit card processing assets and was left with MoneyOnMobile. Since then, it has renamed itself as MoneyOnMobile and is concentrating on growing this business. 

Gross profit stood at $745,269 growing 42.27% from $523,825 in the same quarter last year. However, the company reported a net loss of $2.44 million compared to the loss of $2.69 million. The management attributed the loss to the fact that they are still growing the company and that it is focusing on margins to improve profitability.

Fund raising

MoneyOnMobile said that is looking to raise $10 million in a Series E round of funding and has engaged US Capital Partners, a San Francisco based investment bank. However, no timeline about the fund raise was given. Montgomery said that it is looking at a valuation similar to Citrus Pay.

Citrus Pay recently sold for about $130 million. While our businesses are very different in nature—Citrus Pay being a bank-based card Internet gateway, MoneyOnMobile catering to the unbanked—the valuation of Citrus Pay, however, does bode well for a solid comparable valuation for MoneyOnMobile,” he said.

Comments on competition

Montgomery commented on the competition in India and said that it views Vodafone’s M-Pesa as meaningful competition. “We are seeing some competition from M-Pesa, the Vodafone sponsored service and other local services, but I believe that the market is sufficiently large that there are many areas which are underserved or not served at all and therefore represent a greenfield opportunity for us,” he said.

However, he said other payment companies such as Paytm, MobiKwik, FreeCharge, Citrus Pay and Oxigen  concentrated on serving the consumer audience with card-based payments solutions. Montgomery said that they would be focusing on unbanked markets in India. “These require the consumer to have a previously existing bank account. MoneyOnMobile, on the other hand, is aimed at the remainder of the population that does not have a bank account. The market for our services is vast and largely un-penetrated,” he said.

Download: Financials | Transcript