Indian financial services startup MobiKwik has announced its plans to raise about $84.2 million through the issuance of new shares in an initial public offering (IPO) within its home market. This move comes after the company previously sought to raise around $250 million through the sale of new and existing shares in 2021, but had to postpone its plans due to unfavorable market conditions.
Key Takeaway
MobiKwik, an Indian financial services startup, is aiming to raise $84.2 million through an IPO in its home market. The company, backed by Peak XV, Abu Dhabi Investment Authority, and American Express, has seen significant growth and plans to leverage the funds to further expand its financial offerings.
Second Attempt at IPO
This marks MobiKwik’s second attempt at an IPO, with the startup being backed by Peak XV, Abu Dhabi Investment Authority, and American Express. The company, founded by the husband-wife duo Bipin Singh and Upasana Taku, does not intend to sell any existing shares in the IPO, as stated in the new prospectus. It does, however, plan to raise approximately $16 million in a pre-IPO round.
Diversified Financial Services
MobiKwik operates an online financial services platform, providing digital payments, credit, investment, and insurance products. With over 146 million registered users and 3.8 million merchant partners, the 15-year-old startup has experienced significant growth. Originally established as a mobile wallet provider, MobiKwik has expanded its offerings to include “buy-now-pay-later” credit, personal loans, merchant cash advances, wealth management, and insurance distribution.
Impressive Growth
The company’s Zip buy-now-pay-later product facilitated credit disbursals of $490 million in fiscal 2023, marking a 21x increase from two years prior. Moreover, MobiKwik’s total transaction value across its payments and credit products more than doubled from $1.78 billion in fiscal 2021 to $3.15 billion in fiscal 2023. The funds raised from the IPO will be used to capitalize on its extensive user base and merchant network, enabling the cross-selling of additional financial products.
Path to Profitability
SBI Capital and DAM Capital are the lead book running managers for the IPO process, as indicated in the prospectus. Although MobiKwik was unprofitable in the financial years 2021, 2022, and 2023, the company achieved profitability in the six months ending September 30, 2023. During this period, it disclosed a profit of $1.1 million on revenue of $29.3 million.
Joining the Ranks of Indian Startups
MobiKwik joins a cohort of Indian startups venturing into the public market this year. Other loss-making startups, such as Ola Electric and FirstCry, have also filed their draft prospectuses for initial public offerings in the recent past.
