In an email interview with ET, Taku discusses Mobikwik’s deferred listing, demand for BNPL, and more. Edited excerpts:
How do you see the markets now? Are you planning to revive your listing plans anytime this year?
Currently, the macroeconomic factors are not conducive for technology companies to go public. Globally, factors such as inflation, rising interest rates, and the Russia-Ukraine war are having a disruptive impact on the capital markets. The US has reported the highest ever inflation rate at 8.5%. Moreover, the ongoing war has aggravated the situation and made a significant impact on all Asian indices.
We are waiting for the markets to stabilise and will list at the right time. Mobikwik clocked revenue of Rs 540 crore in FY22, an 80% year-on-year growth while achieving profitability in the last two quarters.
What is the demand like for BNPL (Buy Now, Pay Later)? With interest rates rising, how do you see demand being impacted?
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BNPL is the fastest-growing business segment for Mobikwik, which recorded five times growth in Zip gross merchandise value (GMV) and transactions, and four times growth in Zip users. The repeat rate for Mobikwik Zip (the BNPL product) users is 83%, with average monthly spending per user at around Rs 3,339. There were 20.3 million recorded transactions for Zip in FY22.
Our BNPL product is focused on addressing the unmet credit needs of the digitally-savvy millennials from tier-II, tier-III, and tier-IV cities and towns in India. Formal credit has only reached 4% of the Indian population in India, which is abysmal when compared with other developed nations. The gap between the digitally-paying users – currently at 250 million (expected to grow to 500 million) – and the number of unique credit card holders – 30-35 million – is huge.
The increase in the number of smartphone users and boom in online shopping trends will add to the BNPL growth. The impact of interest rate hikes and inflation is higher in the developed markets where the baseline interest rate was low.
What are some of the new products you plan to launch?
We want to solve the financial needs of digitally-savvy Indians and change the way financial services are distributed in India. With this aim, we are working to launch new products and services.
Mobikwik is foraying into P2P lending with ‘Xtra’. The product will enable our customers to earn an interest up to 12% per annum on their investments by lending to other high-credit and trustworthy customers. The product will be launched in partnership with RBI-registered NBFC, Lendbox.
Our product team is working to launch an all-new experience for our users. We will soon be bringing various credit products such as personal loans, credit cards, and EMI loans, among others, with our lending partners.
