Inc42 Daily Brief
Stay Ahead With Daily News & Analysis on India’s Tech & Startup Economy
Bengaluru headquartered micro product and services sales platform, Instamojo went public with its performance numbers this month.
CEO and co-founder Sampad Swain in a blogpost revealed Instamojo’s performance by the numbers for the financial year 2016–17:
The startup incorporated a digital wallet in its payment gateway in September 2016. As per recent stats shared by the company, ‘1 out of every 100 online SMEs use Instamojo’.
It claims to have 250K registered merchants, enabling them to accept all modes of digital payments and sell online directly to consumers in two minutes with just a phone and bank account.
Instamojo was founded in 2012 by Akash Gehani, Harshad Sharma, and Sampad Swain. It allows users with a mobile device and a bank account to accept payments using credit and debit cards, e-wallets, and via UPI.
The startup helps merchants build their online identity and sell, manage and grow their businesses online. It provides a suite of tools, including an online store where merchants can showcase their products and services. Merchants can also connect to a marketplace which allows business owners to connect with sellers offering services such as digital marketing, content, SEO design web hosting, logistics, SMS marketing, etc.
In November 2014, it raised $2.6 Mn in Series A funding from Kalaari Capital, Blume Ventures, 500Startups and others.
Sampad says that demonetisation provided an impetus to adoption of digital payments. He further added “We are also closer to profitability (cashflow break-even). We are at a stage where we can think profitably without making a trade-off between business growth and our burn rate. In simple words, we will continue posting strong growth numbers Q/Q without compromises.”
As per a company statement, Instamojo increased the number of merchant registrations on the platform by 106% and witnessed a 150% growth in new merchant activations in the last financial year. Digital payment transactions performed on Instamojo’s platform have grown by over 178%, in the last year alone.
The startup is also aiming to expand its current merchant base of 1 Mn by next year. Talking about the customer acquisition, Sampad said, “As we add more merchants to our platform, we expect our CAC (customer acquisition cost) to go close to INR 0 (currently at low double digits) which is a huge competitive advantage and perhaps our absolute economic moat.”
The Indian fintech market is forecasted to touch $2.4 Bn by 2020. According to a report by TechSci Research, the mobile wallet market in India is projected to reach $6.6 Bn by 2020.
Post-demonetisation in November 2016, digital wallet firms witnessed an unprecedented surge in demand. It brought a shift in the traditional approach of conducting transactions and MSMEs also drifted towards adopting digital payments. To further ensure that transactions done through ewallets are safe, the Ministry of Electronics and Information Technology (MeitY) introduced a set of guidelines for wallet firms in March 2017.
Other startups in this segment include Paytm, MobiKwik, PayU India, Freecharge, Oxigen, among others.
Note: We at Inc42 take our ethics very seriously. More information about it can be found here.