Payment Startup MobiKwik Set To File DRHP Next Week

Gurugram-based payments and financial services startup MobiKwik is planning to raise $250-$300 Mn through an initial public offering (IPO) and is set to file a Draft Red Herring Prospectus (DRHP) with the capital markets regulator within a week, according to reports.

MobiKwik is planning to go for an initial public offering (IPO) by early 2022 and has been preparing its draft red herring prospectus for the past couple of months. The latest fundraise could be part of a larger pre-IPO round, as seen in the case of Delhivery, PharmEasy, PolicyBazaar.

Mobikwik completed the paperwork on Thursday and could file it with the Securities and Exchange Board of India (SEBI) soon, wrote  Bloomberg. 

In June, MobiKwik raised $20 Mn from the United Arab Emirates (UAE) sovereign wealth fund Abu Dhabi Investment Authority. The ADIA has picked up a minority stake in the fintech company, which is now valued at $700 Mn.

Given that MobiKwik wants to list publicly, it will look to bring new investors on board and get a fresh valuation ahead of the listing.  The company reportedly plans to raise $200 Mn to $250 Mn at a valuation of $1 Bn with its public offering. Pre-IPO rounds help companies bring comfort to retail investors that their valuation is valid, particularly, if the startup has closed its earlier rounds a year or two earlier. It’s also about attracting new investors to the cap table to prove the pre-IPO health of the company.

MobiKwik is planning to go for an initial public offering (IPO) by early 2022 and has been speculated to be preparing its draft red herring prospectus for the past couple of months. The latest fundraise could be part of a larger pre-IPO round, as seen in the case of Delhivery, PharmEasy, PolicyBazaar.

Founded in 2009 by Singh and wife Upasana Taku, Mobikwik has raised over $165 Mn till date. Singh and Taku collectively own about 33.2% stake in the company. MobiKwik started its journey as a digital wallet, but has transformed into a horizontal fintech platform that offers multiple financial services including credit, insurance, gold loans. 

The development comes when MobiKwik’s rival fintech decacorn Paytm plans to file a DRHP by July 12 for its IPO. Earlier this week, restaurant aggregator Zomato announced its public issue slated for July 14-16, with the online food delivery firm looking to raise as much as INR 9,375 Cr.

MobiKwik Data Leak

MobiKwik has had its share of controversies. The database of 110 Mn (11 Cr) Mobikwik users was leaked on the dark web in January 2021. The 8.2 TB of database included not only personal and financial details of individual customers but also details of merchants that have procured loans from the company. Reserve Bank of India (RBI) took notice of the matter and directed the payments startup to get a third-party audit conducted through CERT-In (Indian Computer Emergency Response Team), the cybersecurity agency of the Indian government. Further, the payments company was asked to submit the report to the RBI without any delays. However, there’s no word on whether MobiKwik has completed this audit and submitted the report.

In September 2020, the fintech startup announced that it has started the process for public listing by 2022. As a part of this process, it had elevated senior vice president Chandan Joshi to the position of cofounder of the company.Mobikwik is said to be conducting over one million daily transactions across its network, including on its digital wallet, UPI and bill payment services.