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Taking a big step towards positioning itself as a top consumer finance brand in the digital space, mobile wallet major MobiKwik has entered into a strategic partnership with Bajaj Finance Ltd to transform itself into financial services App from a payment App.
Under this strategic partnership, Bajaj Finance has picked up 10.83 per cent equity stake in MobiKwik for about Rs 225 crore and offer its lending (purchase finance, credit card, mortgage loans and personal loans) and insurance products to be sold through MobiKwik App.
“This partnership is a simpler and better strategy for us to offer a full service financial suite to customers without having to go through the complexities of regulations and licensing. This puts us at a significant advantage ahead of competitors”, Upasana Taku, Co-Founder, MobiKwik told Business Line here on Thursday.
MobiKwik, which current has user base of 55 million, will through this partnership immediately get access to about 100 million customers of Bajaj Finance.
From a combined customer base of 155 million today, MobiKwik will aim to offer financial services to 300 million users in next couple of years, she said.
For MobiKwik, the capital raising from Bajaj Finance will be its fourth round of funding and is significant in another aspect as well. This will be the first time that capital is being raised from a listed domestic investor/corporate house. All the earlier rounds came from foreign investors, according to Taku.
“We look at Bajaj Finance’s decision to invest in us as strong vote of confidence in us”, she said, adding that the deal signalled that large deep-pocketed traditional corporate houses in India have now started to look at start ups for their growth opportunities”, she said.
Taku, who had earlier this year indicated that MobiKwik plans to raise $ 100 million capital this year, said that the current round (about $ 32 million from Bajaj Finance) was part of this plan/
“We are continuing to talk with other investors for the balance $ 70 million or so”, she said.
Asked as to how the latest round of funding proceeds will be utilised, Taku said that it would be used to expand the payments business of the company and build new product lines that will help the company to profitability.
“Initially we were hoping to break even in early 2018, now we are looking at late 2018 or 2019”, she said..
srivats.kr@thehindu.co.in
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