Fintech company MobiKwik targets becoming a holistic financial services provider, with more revenue from verticals such as credit products, investments, and savings products.
“We are becoming a digital bank-like platform — no longer just a payments story, no longer just a credit story, because we also have investments and savings offerings, and we will bring more products,” MobiKwik co-founder Upasana Taku told businessline.
On the company’s plan for initial public offering of shares, which was withdrawn in November 2021, Taku said the move was still in the offing “at the right opportunity”.
In the first quarter of FY24 the fintech reported a 68 per cent growth in revenue at Rs 177 crore, while EBITDA nearly trebled to Rs 13.6 crore. It expects to register a revenue of Rs 1,100 crore in FY24 and net profit of Rs 40-50 crore.
Edited excerpts of the interview.
How do you see the growth in your core payments business?
The payments business is definitely a fast growing and evolving business for us. We continue to acquire a good 20 million-plus users every single year and it continues to be about 50 per cent of our revenue. The brand recall and retention is extremely strong. We are not chasing vanity metrics; and whether it is revenue growth, GMV (gross merchandise value) growth or consumer growth, the numbers are all pretty solid.
You also have a digital credits vertical, launched five years back. How does that sync with the payments business?
Payments continues to be a low-margin business — it is a 1-1.5 per cent of revenue business. In the credit business I make 4-10 per cent on the revenue. You know, we also launched digital investments and savings products. So, today, MobiKwik is almost like a digital banking platform, where we pull in the customer, and we acquire the merchants for our payments. But we also increase our engagement, as well as monetisation, by cross-selling our financial products. We intend to go broader, by offering different types of credit products to our customers as well as merchants.
What will be the main driver of the revenue growth you are expecting in FY24 — payments or digital products?
Both verticals are growing and will contribute to the stellar revenue growth. Financial services is growing faster and is also a high-margin business. A lot of our small credit customers are moving forward in life, their earnings are increasing, and so also their needs. So we are offering them higher-ticket credit. This year, roughly 60 per cent of the revenue will come from digital financial services, which is mainly the credit products, followed by savings and investment products. The balance 40 per cent will come from payments.
At some point do you see your credit and other services vertical having a larger share?
Absolutely. It will keep growing. This month we are expecting to launch our merchant lending products — a whole new category. Therefore, financial services distribution income from credit and investment products will only keep increasing as we launch more and more financial products.
What is the status of your proposed IPO. You had recently said you would wait for three to four quarters of profitability before launching an IPO. You have been profitable for two quarters now.
A. My big learning from the experience of the last one and a half years — the reception that internet companies in India and abroad received — is that showing a path to profitability in the future will not work. Investors have lost money, they have smartened up and they want to see the report card now, performance track record now. We are using this time to build a track record, build a report card. IPO is more of a milestone credibility and taking the company to the next level.
There’s no pressure on us (to do an IPO). We are building the company systematically. We are showing better growth numbers, profitable numbers. The markets have already shaped up better in the last two to three months. So let’s see, fingers crossed, at the right opportunity we will definitely think about bringing an IPO.
