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MoneyOnMobile revenues increase 193% YoY to $2.84 million in Q3FY18; to launch AEPS based solution

MoneyOnMobile has raised $12.6 million over two rounds of funding, and has also undergone two debt restructurings (moving debt to equity) worth $5 million, the company’s chairman and CEO, Harold Montgomery said during the earnings call for the quarter ended December 31, 2017 (Q3FY18). Of the $12.6 million, $7.6 million was raised through Series F preferred stock, and $5 million was raised through Series H convertible shares. He added that the company will be using the funds “to diversify our product portfolio and broaden our geographic reach in India.”

MoneyOnMonbile posted revenues of $2.84 million in Q3FY18, up 193% year-on-year (YoY) from $0.97 million in the same quarter last year.

  • It posted a gross profit of $1.52 million, up 164% from $0.58 million in Q3FY17.
  • However, the company said that the gross profit margin for the quarter stood at 53% compared to 59% in Q3FY17.
  • Net loss for the quarter stood at $0.42 million, improving significantly from a net loss of $1.11 million in the same quarter last year.

The company said that the growth in revenues was driven by increased number of MoneyOnMobile ATMs in operation, domestic remittance (money transfer) growing faster than the market, and increase in revenue generated per retailer.

Revenue across categories on the dip

Since July 2017, MoneyOnMobile’s growth in revenue from money transfer or domestic remittance has been on a decline. It had increased 42% month-on-month (MoM) in July 2017, but since then growth declined to 21% in August, 17% in September, 9% in October, 1% in November, it picked up a bit to 10% in December, but in January there has been a negative 10% dip in revenue from money transfers.

It’s worse for MoneyOnMobile ATMs, which registered a negative 71% MoM decline in revenue in January 2018, while revenues from mobile/TV top-ups posted a 2% MoM growth in January compared to 6% in December.

Bank of India deal

The company signed an agreement with Bank of India to set up 3,000 new MoneyOnMobile (MOM) ATMs. Bank of India will be the second bank for processing MOM ATM transactions.

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Biometric cash out solution

MoneyOnMobile will also be launching a biometric-based (essentially fingerprint scanner), cash out solution, which will use the Aadhaar Enabled Payment System (AEPS). The company said that this product will “permit cash out withdrawals up to five times larger than our current MOM ATMs.” Note that no specific launch date has been mentioned.

Operational data

  • More than 350,000 agent network in India.
  • Present in 700 cities.
  • Can undertake 55 financial transactions.
  • The company claims that it has served more than 200 million customers based on unique mobile numbers.

Except for the slight increase in its agent network, MoneyOnMobile’s presence in India and the number of customers has remained the same from Q1FY18.

In the earnings call, Montgomery mentioned that the company has very low customer acquisition costs.

We have negligible customer acquisition costs. We think of the retailer as our customer – the local retailer who is selling our services – known as our agent. It’s important for us to provide him with a money-making value proposition that fits both his needs and capabilities as well as being appealing to his local consumer base. Our system is based on a revenue sharing model which means our agents earn more the more they transact with us.

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