BT EXCLUSIVE: MobiKwik to go public early next year: Upasana Taku, co-founder

Digital payments major MobiKwik is looking to go public early next year with a likelihood of losses having halved in the December quarter, the company's co-founder and Chief Operating Officer (COO), Upasana Taku told BusinessToday.In in an exclusive interaction. Taku said that the firm may go public after the audited December quarter results.

The company reported Rs 110.9 crore loss during FY21, according to its Draft Red Herring prospectus (DRHP) which was filed in July this year.

"As a company co-founder, I want to have the best possible IPO for MobiKwik and the onus will lie on us to maximize the probability of the success. We did not deem it fit to go public at the time when there was some negativity around the fintech space in market as our investment advisors cautioned. I am not in a hurry to do it. There is no concept of bravado here. Most of the capital raised will be utilised for growth. Once we have audited results in hand, and the business has grown, it will be evident to the investors how the company plans to grow," Taku said.

The fintech leader told BT that the assessment of the financials of MobiKwik from April-September period (FY22) shows a significant revenue jump from FY21, with the losses having almost halved, which also is indicative that the company may be profitable in several quarters from now. "If we are hugely cutting down on our losses, we will break even in a couple of quarters from now," Taku added.

MobiKwik -- which was founded in 2009 by Taku and her husband, Bipin Preet Singh -- got the markets regulator SEBI's approval for an IPO in October this year to raise Rs 1900 crore (or $255 million), which comprises a fresh issue of Rs 1500 crore and an Offer-for-Sale (OFS) of Rs 400 crore. Taku pointed out that under the SEBI regulations, the company has a year's timeline from the approval date to go public and is taking its profitability path seriously with losses almost expected to halve during the December quarter.

The company is seeking $1.5-$1.7 billion valuation during the IPO, as earlier reported by BT, up from its earlier $1 billion valuation that it had reached after an ESOP sale. She also played down the reports of the investors having pulled out of the company's public listing decision saying that there are no differences of opinion between the investors and the company's management.

"We are in fact talking to a clutch of investors for a pre-IPO placement, which we have referred to in our Draft Red Herring Prospectus," Taku clarified.

"A lot of speculative stories were written naming some investors who backed out, which are completely baseless. We have a strong group of committed investors who believe in the company's growth story," she said.

The MobiKwik COO is clear that there is no pushback from the investors and that talks are going on to add a bunch of a few more investors for a pre-IPO placement. "We are talking to the new investors for a funds-raise as well. The recent $20 million funds raise from Abu Dhabi Investment Authority is a part of the same," she added.

Taku also pointed out that the company added 7 million users in the June quarter Of FY22 and 20 million during FY21 . The userbase of the platform now stands at 108 million users. She argued that MobiKwik's business model revolves around a combination of mobile wallets and its Buy Now Pay Later (BNPL) offerings, which the company provides in coordination with banks and NBFCs.

When asked whether the UPI success story has taken away the advantage that the mobile wallet business had in earlier years, Taku, while referring to the RBI statistics, said that the mobile wallets transactions have not declined and the company is now strategizing to build its BNPL offering by leveraging the existent mobile wallet user base that MobiKwik has developed over the past one decade.

"Our revenue model is clear and we have stated in our DRHP that we charge merchants on the mobile wallet transactions in the range of 1.7-1.8 per cent and this drives 90 per cent of our business. BNPL is an extra offering to target a huge market with an average income of Rs 30,000-50,000 on a monthly basis in India which can access the credit and pay after 15 days. We have been able to build strong merchant partnerships over the last decade and drive their GMV, and who can have an access to our userbase," Taku said.

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