VC-backed Mobikwik files for India IPO

The offer will comprise up to INR15 billion in new shares and INR4 billion in existing shares held by Sequoia Capital India, hedge fund Tree Line Management, American Express, Cisco Systems, and local non-banking financial company (NBFC) Bajaj Finance. Husband and wife founders Bipin Preet Singh and Upasana Taku account for nearly half of the existing shares put up for sale.

Mobikwik was valued at approximately $735 million on closing its most recent private funding round – a INR1.49 billion commitment from Abu Dhabi Investment Authority (ADIA) – in June, AVCJ Research’s records show. The company has raised more than $200 million to date.

The filing comes at a time of growing interest in domestic listings by Indian start-ups. Food services platform Zomato launched its IPO process this week with a view to raising INR93.8 billion. An anchor investor group has agreed to cover 45% of the offering. Paytm, the country’s largest digital payments player, is poised to make its filing and will reportedly look to raise INR16.6 billion.

Mobikwik launched its mobile wallet in 2009, catering to the many consumers who do not have debit or credit cards. Coverage initially focused on utility bills, but it has since expanded into e-commerce, food delivery, gas stations, large retailers, and pharmacies.

In physical stores, the wallet can be used to pay for goods by scanning a QR code. As of March, there were 101.4 million registered wallet users and 3.44 million commercial partners. Mobikwik introduced payment gateway Zaakpay in 2012, enabling websites and mobile apps to collect payments via debit and credit cards, mobile wallets, and online banking.

A buy now, pay later (BNPL) product arrived in 2019, targeted at middle-class consumers seeking credit for small daily purchases. As of March, 22.3 million users had been pre-approved for the service, with nearly four in five becoming repeat users in the 2021 financial year. Gross merchandise value (GMV) hit INR4.8 billion in 2020, with COVID-19 behind a fall to INR2.99 billion in 2021.

Mobikwik also cross-sells wealth management and insurance products to users of its core services. The company works with 36 asset managers that supply products available through its online mutual fund platform, and there are similar relationships with four insurance industry partners.

Mobikwik generated income of INR3 billion during the 12 months ended March 2021, down from INR3.7 billion a year earlier. However, the total represents a significant improvement on INR1.6 billion in 2019. Costs outstripped inflows, with the company posting losses of $1.1 billion in the most recent financial year and INR991.6 billion in the one before that.

Singh and Taku together own 34.52% of Mobikwik. Baja, which invested INR2.2 billion at a valuation of around INR20.4 billion in 2017, holds 13.86%, while Sequoia has 17.15%. Tree Line, Cisco, and American Express are 4.43%, 2.08%, and 1.81%, respectively, according to a prospectus.

Sequoia and the VC units of Japanese internet company GMO and Taiwan-based semiconductor manufacturer MediaTek led a $50 million Series C in 2016. They were joined by Cisco, Tree Line, and Times Group. A year earlier, American Express, Cisco, InnoVen Capital, Sequoia, and Tree Line took part in a $31.7 million Series B. Sequoia provided a $2.5 billion Series A in 2014.

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• Topics
• South Asia
• IPO
• Financials
• Technology
• India
• Financial Services
• Fintech
• Sequoia Capital
• Innoven Capital