IPO-bound fintech MobiKwik has joined the $1 Bn club after a few of its employees exercised employee stock option plans (ESOPs). The secondary round was led by former Blackstone India head Mathew Cyriac.
In September, the startup had announced that it had reserved 4.5 Mn equity shares, or 7% of the fully diluted outstanding shares, under its ESOP pool.
Cyriac has invested almost twice the price in the current round, compared to his first investment earlier this year, sources close to the development told Inc42.
In June, MobiKwik raised $20 Mn from the United Arab Emirates (UAE) sovereign wealth fund Abu Dhabi Investment Authority. As part of the fundraise, it also added investors such as Cyriac, Padma awardee Sat Pal Khattar, and ex-Infosys CIO V G Dheeshjith as new shareholders, including Sequoia Capital and Bajaj Finance.
The shares in the unlisted market were, in June, trading at INR 895, and the investment had valued MobiKwik at $700 Mn.
The unlisted shares are trading at INR 1,187.35 apiece on October 13.
This investment also makes MobiKwik the 31st unicorn club entrant in India after foodtech Rebel Foods.
The Road To MobiKwik IPO
MobiKwik is planning to go for an initial public offering (IPO) by November first week at a valuation of $1.5 Bn – $1.7 Bn, according to Inc42 sources. It had filed its draft red herring prospectus (DRHP) for INR 1,900 Cr IPO, for which it has already received the market regulator SEBI’s nod.
The latest secondary fundraise could be part of a larger pre-IPO round, as seen in the case of Delhivery, PharmEasy, PolicyBazaar.
Founded in 2009 by Bipin Preet Singh and his wife Upasana Taku, MobiKwik has raised over $165 Mn in primary rounds to date. Singh and Taku collectively own a 35% stake in the Delhi NCR-based startup.
MobiKwik started its journey as a digital wallet and has transformed into a horizontal fintech platform that offers multiple financial services including credit, insurance, gold loans.
As per the DRHP, MobiKwik’s revenue from operations fell to INR 288.5 Cr in FY21 from INR 355.6 CR in the previous year (FY20), which is just over 2X higher than the INR 148.4 Cr reported in FY19 (March 2019). Consequently, total income fell to INR 302 Cr from INR 369 Cr last year. The startup’s total loss for the year jumped up to INR 110.9 Cr from INR 99.1 Cr last year, on the back of an over 20% decline in revenue.
Despite the losses, the startup is positive about the future of the company claiming that a critical element of its business is the ability to mitigate risk associated with buy now pay later (BNPL) operations, including identification of suitable users, appropriate underwriting, and development of a visible and efficient collection strategy.
MobiKwik competes with another IPO-bound fintech giant Paytm, whose parent company One97 Communications, also filed its DRHP for public listing at INR 16,600 Cr, in July this year for which it is yet to receive a nod from SEBI. On the other hand, Mumbai-based fintech Fino Payments has received SEBI’s approval for its INR 1,300 Cr IPO.