Will take a shot at bourses after 3-4 quarters of profit: MobiKwik

Taku said that the company plans on tapping into new investments if it is working on a new product or an inorganic play that requires capital

After deferring its initial public offering (IPO) in November 2021, fintech platform MobiKwik is planning to take a shot at the bourses after demonstrating three-four quarters of profit. 

The company posted its first ever consolidated profit at Rs 3 crore during the first quarter of 2023-24 (Q1 FY24). 

“The number one question for a tech startup, which is going for listing is when will it become profitable and how will it grow? I want to demonstrate that first. This means, we should have three-four quarters of profits to show,” said Upasana Taku, co-founder and chief operating officer (COO) at MobiKwik, in an interaction with Business Standard on the sidelines of the Global Fintech Fest.

Taku did not confirm a timeframe for the IPO, but added that the company is observing the markets and would take a shot at it. 

“When we were going at it (the IPO) last time, we were at the end of the queue in terms of approvals from the Securities and Exchange Board of India (Sebi). Before us, there were multiple IPOs. And, at the end of it, you could see a waning of the market’s appetite,” added Taku.

“I would even say we were not really well prepared. We had just started the process at the beginning of the year and were trying to accomplish it within a six-nine month period. This time, we are thinking about it more systematically,” Taku added. 

Taku said that the company will plan on tapping into new investments if it is working on a new product or a new inorganic play.

“Since we have become profitable, we're not really burning cash. I think we are doing well in terms of generating our own cash,” she said. 

On acquisition plans, Taku said the company is looking at taking major bets. 

“There are companies in different situations because of the funding market. There may be founders, who are willing to align with us as we are an IPO-bound company. We are open to discussions,” she said. 

In 2021, the company faced allegations of a data leak that put the data of around 3.5 million users at risk. The company had worked on its security and compliance since then.

“We have hired an all-star team actually. We’ve made three senior hires in technology. During the last one or two years, we have done a lot of work there. It is not only in the areas of scalability and security, but also in compliance,” she noted. 

The company is aiming to enter the merchant lending space to offer mid-sized and small-ticket loans to existing merchants. 

“If a merchant is doing an x amount of payments, can we offer them faster settlement? Can we offer them loans for a certain period of time in terms of working capital requirements? Many (the merchants) have actually been taking loans from us under the consumer loan option and are using it for their business. So, we want to assess their businesses properly and start enabling them to take loans for their business directly,” she added. 

The company has partnered banks and non-banking financial companies (NBFCs) for underwriting credit. 

“Credit underwriting has been an important asset for us. We collect information from our users, credit bureau and government disclosures, among others. We put all of this data together in 500-600 variables. And based on that, we give a score to the user and create different cohorts of users,” she said. 

Taku said rural India and smaller markets are driving growth for fintechs. 

“About 75-80 per cent of new users are now coming from outside the top 20-50 cities of India. They are coming from smaller cities, towns and even villages. I believe there is a huge growth opportunity,” she added.