MobiKwik’s net revenues grew by 134% to ₹379 crore at the end of FY20 from ₹162 crore on the back of higher revenue from consumer payments. The mobile payments app has a user-base of 120 million and has been expanding its product offerings with lending and investment options over the past year, it said in a blogpost.
The payments company founded in 2009 by Bipin Preet Singh and Upasana Taku has raised a total of $100 million in funding from Sequoia Capital, Bajaj Finance, and American Express among other investors. In December 2020, the company raised ₹52 crore from Hindustan Media Ventures, the investment arm of HT group and from the family office of Infosys co-Founder Kris Gopalakrishnan. This capital would be used for growing its lending and payments business, it said in a press statement. The company plans to launch an initial public offering in 2022.
Revenues from consumer payments, the MobiKwik wallet, increased by 159% YoY to ₹230 crore in FY20 compared to ₹89 in FY19. On the other hand, revenues from fintech products grew by 216% YoY to ₹91 crore in FY20 compared to ₹29 crore in Fy19. Revenues for the payment gateway business, via ZaakPay, grew to ₹190 croresin FY20 compared to ₹101 crore in FY19. While the consumer payments business contributed 63% contribution to the company’s consolidated net revenue, the fintech business contributed 25% contribution and the payment gateway business contributed 13%, it said.
The company was able to grow its revenues from consumer payments by expanding use-cases, partnering with Google for mobile recharges and developing a Biller Stack with e-commerce partners like Flipkart it said. Whereas on the fintech side, it launched a credit card product in partnership with American Express through which its users can get a credit line on their MobiKwik wallet last year.
At present, 15 million of MobiKwik’s customers have been pre-approved for the credit line and the company aims to deliver the product to at least 25-30% of its user-base by the end of the year, Bipin Preet Singh, co-founder and chief executive officer of MobiKwik said during a panel discussion at the Digital Lenders Association of India’s 2021 Conclave.
“Given that UPI while being an amazing platform provides no monetization, we believe the right digital wallet will combine the best of debit and credit capabilities to deliver a payment instrument where you can link a bank account yet draw from a credit line. Market data clearly shows that a credit card user spends 14x as much as a debit card user every single month. A credit card is the most basic of credit instruments – it is needed because incomes are steady month-to-month, but expenses (such as school fees or a health expense) are lump” MobiKwik Blog.
The company’s earnings-before-interest-tax-depreciation-and-amortisation (EBITDA) improved by 60%, from a loss of ₹112 crore in FY19 to a loss of ₹45 crore in FY20. Its free cash-flow or EBITDA cash loss stood at ₹8.5 crore in FY20 compared to ₹98 crore in FY19, an improvement of 91%. The Contribution Margin (CM) increased by 233% year over year (YoY) to ₹199 crore, it said.
“We turned CM positive in Oct 2018 and continued to be positive for each month through the close of the fiscal year in March 2020. Eighteen months of positive margin is a first for any Consumer Tech business; even more so for one that operates in a hyper competitive market such as Payments in India” MobiKwik Blog.