Indian Economy News

Mobikwik raises fresh funds from Japanese payments company

Mumbai: Gurgaon based mobile wallet company Mobikwik has raised between $50mn and $70mn from GMO Payment Gateway, a Japanese payments company and MediaTek, a Taiwan based semi-conductor company, said two senior officials who did not want to be named. The development comes at a time when mobile wallet companies are struggling to remain relevant with banks pushing aggressively into the retail digital payments space.

A company spokesperson said, "Mobikwik has raised an undisclosed amount in the Series C round of funding led by GMO and Mediatek. The existing investors such as Sequoia Capital and Treeline Asia have also participated in the current round."

Mobikwik, which primarily runs a mobile wallet, failed to receive the payments bank licence from the Reserve Bank of India. However with around 25 million users and half a million transactions happening every day through its platform, Mobikwik is one of the biggest wallet companies in India after PayTM.

Accepting the fact that fund raising has become very difficult, the Mobikwik spokesperson added, "With investors stressing on unit economics, sustainable growth and a sound business model even large Indian startups are finding it very hard to raise funds."

Recently Flipkart got valued at $11bn against an initial estimate of $15.2bn and Rocket Internet which runs the fashion portal Jabong got valued at $1.13bn against the estimated $3.45bn.

"Today customers do not have any loyalty for wallets. Wallets are mostly a means for getting the cheapest deal or the highest cashback. This makes it difficult for wallet companies to have a steady revenue stream," said one of the persons quoted above. "Wallet companies are trying alternate forms of revenue generation like fee income by selling insurance products and mutual funds, however even that is difficult as their customers are not loyal to them," the person said.

Mobikwik is already in the process of diversifying its business and presently offers micro credit facilities to its users. It offers customers who do not have access to online banking facilities, to recharge their wallets through their pick-up agents.

Last year the company had raised around $25 mn from Tree Line Asia and Sequoia Capital. Singh had plans to raise between $80mn to $100mn and take the valuation of the company to $400mn.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

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