Mobikwik is looking to expand its merchant business, both on the lending and liabilities side, in the coming year, said Co-Founder and COO Upasana Taku. It has a network of 4 million merchants comprising e-commerce players, physical retailers, mom and pop stores and billers.

“We’ve started merchant loan offerings, and are looking forward to scaling that up this year,” Taku told businessline, adding that this will include working capital funding and credit against receivables, among other products.

“We also want to bring investment products and other offerings for small businesses. Right now, we only offer payments on the merchant application and some insurance products,” she said.

Expanding financial services distribution

Of its user base of 135 million customers and 4 million merchants, Mobikwik offers credit to 4 million customers -- largely comprising small ticket credit for daily life usage such as shopping, pay later and EMI products instead of open-ended loans like some of its peers.

The platform has an AUM of around ₹600 crore, with the average transaction size at around ₹20,000. Mobikwik has also been looking to grow the share of the high-margin financial services distribution business, which currently accounts for 45 per cent of revenue.  

“We are trying to build a full sort of digital financial services platform,” she said, adding that the investments and insurance verticals are still early stage and need to be scaled up as a part of the financial distribution business.

Profitability and IPO

After its IPO approval lapsed in November 2022, Mobikwik is now looking to reapply for an IPO in H2FY24, albeit with better financials and market conditions.

“We may or may not wait for FY24 to end,” Taku said, adding that the fintech is hopeful of reporting full-year profitability for FY24 and at least one profitable quarter in FY23.

Mobikwik turned profitable in 2022, reporting its first quarterly profit for the quarter ended December 2022. However, after two quarters of profitability, it slipped back into the red in the first two quarters of FY23.

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Mobikwik’s consolidated revenue rose to ₹527 crore in FY22 from ₹289 crore, whereas loss narrowed to ₹73 crore from ₹98 crore in FY21. The contribution margin has been increasing steadily over the past two years from 11 per cent to 25 per cent in FY22 and is expected to be around 30-35 per cent for FY23.

“Once we cross ₹1,000 crore in revenue, which we should in the next year, then we will be able to demonstrate very strong profitability for the full year as well as on a monthly and quarterly basis,” Taku added.