IPO-bound MobiKwik does not expect impact on its revenue due to the Reserve Bank of India’s (RBI) recent guidelines, which barred peer-to-peer (P2P) exchanges from offering instant withdrawal feature, among others, co-founder and CFO Upasana Taku tells businessline in an interaction. MobiKwik offers P2P investment product in partnership with a large P2P platform. Edited excerpts:
Will the RBI’s P2P diktat affect your IPO plans?
We have been a payments platform for the last 15 years, and 5-6 years ago we asked ourselves why don’t we also fulfil other financial needs of users.
Most of our users are not from metro, they are from tier-II cities and lack access to financial services products other than a normal bank account. So we started with digital credit. We are not the lender, our role is limited to being a distributor. We know our customers well, we have done their KYC for wallets, we know their history and based on profiling we can bring right product with a right partner to users.
To that extent, we started with small ticket credit product, then launched personal loans and merchant loans for MSMEs. Then we said credit is not enough, we must offer our users more financial products.
Accordingly, we created investment products including a FD market place in partnership with deposit taking large NBFCs and small finance banks, which offers higher returns than conventional savings account.
We also launched digital gold and direct mutual fund plans. Therefore we have multiple products under the investment vertical, one of which was P2P lending...everyone has to adhere to regulatory guidelines.
Ours is a multi vertical business, and in every vertical there are multiple products with different partners for every product, so no issues with one product or partner, could create implication on our business. Especially given that we are not manufacturer of the product.
Will it affect your revenue substantially?
We are in the process of conducting an IPO so I cannot divulge details on financials. But I can tell you that our first quarter audit is over, and I am also privy to Q2 unaudited numbers, and everything looks fine.
What are the new products lines you will enter post IPO?
We have set aside around Rs 250 crore for expanding financial services distribution business. We want to launch new credit products like credit cards, vehicle loan and multiple loan products for small merchants, MSMEs and end consumers.
Then we want to expand investment product suite. We recently launched Lens.AI, and we want to focus on insurance too. The intention is to provide all financial products to our users.
Further, we will use ₹135 crore for investment in data, AI & ML, products, and another ₹135 crore in payments business. We are now the largest wallet player (in value terms). We are now trying to grow faster in UPI space. In fact, our newly launched pocket UPI product is growing extremely fast as it is a differentiated product. We are also expanding our merchant base, which stood at 4.3 million. We are signing up sound boxes, payment machines and working capital loans for merchants.
What is the guidance on business growth for this fiscal?
We are growing our revenue by over 50 per cent every year, despite the fact that we are the least capitalised company in our sector. We have raised only ₹1,200 crore in 15 years. Meanwhile, our competitors raised $2-$5 billion. Despite these factors, we have grown over 50 per cent for multiple years and while peers are not profitable, we are. We will continue growing top line by 50 per cent for many years and will remain profitable.
Has the regulator tightened norms to an extent that it is stifling innovation in fintech sector?
I don’t believe so. We just launched pocket UPI, and now we are launching Rupay credit card which will work everywhere with UPI.
These are innovative products. Along the years, we have been constantly innovating. Fintech is a dynamic field where newer products are needed at regular intervals, in line with what regulations allow, customer demands, and products that banks and NBFCs are happy to partner with. So I don’t think RBI is going after tech savvy companies.
Many companies recently penalised by the RBI are non-tech companies. We should be very clear that it is not going to be ‘Wild Wild West’.
It is always going to be a well regulated sector. In fact, the execution capability of a fintech company depends on how fast can you adapt to changing regulations and come up with innovative products that users and customers will love.