The MobiKwik story that Economic Times never told

Here are the questions asked by Economic Times to us & the actual responses sent to Economic Times on record. Do compare the coverage :)

To be attributed to Mr. Bipin Preet Singh, Founder and CEO, MobiKwik

1. We understand that Mobikwik is in the process of raising funds, but as a startup entrepreneur how difficult is it to convince investors to invest in a company which is fighting for market share with well capitalised entities like PhonePe and Paytm?

Ans: MobiKwik is at an interesting stage of growth right now. We have a network of over 3 million merchants and a registered user base of over 107 million users. We are fast evolving from being a leading mobile wallet player to becoming India’s largest full stack fintech platform. This is in line with our vision to enable a billion Indians with one tap access to digital payments, loans, investments and insurance by the year 2022. We have seen constant growth over the years. Our GMV and revenue have tripled in the last one year. This year again, we are targeting a four-fold growth. We are looking to hit USD$ 20 billion in terms of transactions by 2022.

We are the undisputed number 2 player in the market and are here to play the long term game in financial services. We are very patient and don’t get distracted easily.

We have a long term investor base which includes the likes of Bajaj Finance. The Indian startup ecosystem has already seen what happens to well capitalized entities which burn a lot of capital quickly. It is important to control your own destiny. We will raise funds but there is no hurry.

2. Also with the entry of Google, Truecaller and Whatsapp in the space of UPI, how difficult has it been to retain users?

Ans: With big global players entering the Indian digital payments market in 2018, it is evident that there is space for many players to grow and the market is still at an early stage. This validates our approach. We are the app with the fastest adoption on UPI in spite of these global players.

How do you compete with Google and Facebook on capital? Its clearly not a moat that anybody can exercise. Therefore, we look for core differentiators which are hard to replicate. For instance, our merchant network of over 3 million merchant is hard to replicate. Similarly, financial services like credit may end up being the biggest drivers for adoption of digital payments (sample the value of transactions done by 37 million credit cards is higher than that done by 800 million debit cards). This requires localization and understanding of on-ground execution.

3. Do you see the mobile wallet and digital payments business shift away from the cashback incentive game on to a place where customer experience is more important? We still see players giving huge cashbacks and burning capital, how does Mobikwik plan to create a separate value proposition?

Ans: 90% of all MobiKwik transactions are non-incentivized. So, our business does not run on cashbacks. Between the different apps, customers especially recharge customers are switching basis who is providing cashbacks. This is not a sustainable strategy.

We were never in the cashback game. Our burns are also one of the lowest in our industry. We believe in building a loyal customer base that transacts on our platform on an ongoing basis. Last year, we had rolled out ‘Supercash’, the first ever loyalty initiative launched by a mobile wallet in India. Under this initiative, the user saves money every time he transacts on MobiKwik. The user can earn reward points at all MobiKwik merchants, including their local mom and pop stores. Supercash initiative was well received by the arbitrage generation as millennials like to save money wherever possible. Most importantly Supercash focuses on repeat behavior and not on building vanity metrics.

4. Payments is a valuation business, atleast that is what your competitors are playing: where do you stand at that, especially being one of the last remaining independent wallet forces in the country?

Ans: You are right- we are the only true independent payments player, not affiliated to any large global conglomerate. We are the only payments company with Indian ownership and we have scale across all dimensions- user base, merchants and a brand that customers identify with. Being independent is allowing us to take the lead in innovation. We are already the first payments company to enter digital lending in a big way. In addition, we have the 9th largest company in India (Bajaj Finserv) as a strategic anchor and partner. This year we project revenue in excess of USD$ 50 million. If this position is something to worry about, then I am not worried.

5. How do you look at the regulatory scene in India: from a wallet friendly regulation regime we are seeing it change to a strict expensive regulatory framework. How do you react to that?

Ans: The Modi government is 100% committed to the vision of ‘Digital India’ and we really appreciate the scale and pace of change that is happening. It is however, also clear that fintech regulation is in little bit of a mess with multiple authorities creating contradictory goals. This is impacting all companies of all sizes across the financial services industry.

We do not consider ourselves to be ‘just a wallet company’ anymore. Rather, we focus on providing the user with the best possible solution, whether it is UPI or cards or wallets. So, we are largely de-risked. KYC was a challenging move, but we have taken it as an opportunity and prepared for it well in advance. Today, we have over 50% of our users who are KYC complaint.

6. Many top level vertical heads have quit Mobikwik over the last few months, how do you respond to people leaving the company? Do you have plans to hire fresh talent at the top or do you wish to make it leaner and fitter?

Ans: Some of the people who joined us at the time of demonetization, were hired for a specific role, since it required a different focus.

Now that we are building out financial services, we need people with different skill sets. We have actually hired more senior people in the last 6 months, than ever before.

The pace of growth is fast and the team, across levels, is expected to deliver at the required pace.

We will continue to hire fresh talent across levels, as per our business requirements.

7. What are your fund raising plans? Are you on track, if so could you give us some sense as to how much you are planning to raise now and by when?

Ans: MobiKwik has been raising funds every year, since 2013. We are in a comfortable position now and not in a hurry to raise. Its very important to get the right partner who matches our long term vision.

8. We are also told that you had approached other companies for a buy out or an exit, is it true or are these rumors that are floating in the market?

Ans: On the contrary, we are in the market to buy or invest in a few companies. We have already invested in one company and have issued 2 more term sheets.