Digital payments major One MobiKwik System Pvt Ltd is planning on listing on stock exchanges by September 2021, through which it could raise between $200-250 million, Bloomberg reported. The company will file the draft prospectus for its initial public offering (IPO) by May, which would value MobiKwik at over $1 billion, the report said.
MobiKwik is one of the oldest digital payments wallet players in the country, getting its Reserve Bank of India license back in 2013. If it’s all smooth sailing for the company between now and September, MobiKwik would be the first digital payments wallet company to list shares. The company will have beat its digital payments rivals like Paytm and PhonePe, both of whom are also planning IPOs in the coming years.
Since its inception in 2009, MobiKwik has raised a total of $100 million in funding from Sequoia Capital, Bajaj Finance, and American Express among other investors. According to Bloomberg, the company will hold a pre-IPO funding round that could give it a valuation of $700 million. The company has a user base of 120 million users and over 3 million merchants. While a digital wallet is MobiKwik’s basic offering, it has expanded into credit cards through a partnership with American Express.
Despite the large user base and expansion into lending products, the company’s Unified Payment Interface (UPI) service pales’ in comparison to Paytm, PhonePe and Google Pay who dominate the market. According to data from the National Payments Corporation of India, in February 2021, MobiKwik processed only 1.92 million transactions worth Rs 216.94 crore during the month. It has a rank of 36 out of the 54 third-party UPI apps.
In FY20, the company’s net revenues grew by 134% to ₹379 crore from ₹162 crore in the previous year. Its 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. While the free cash-flow or EBITDA cash loss stood at ₹8.5 crore in FY20 compared to ₹98 crore in FY19, an improvement of 91%.
- UPI failure rate improves in February, PhonePe retains leadership position
- MobiKwik’s revenues up 134% in FY20 on the back of consumer payments and fintech lending
- Swaths of data key for payments companies entering lending