MobiKwik, India’s leading mobile wallet service provider, is in advanced discussions with a clutch of private equity investors as well as strategic investors to raise $80-100 million.
According to the company’s management, the money will be deployed for its offline expansion as well as payment banking, for which it has applied to the Reserve Bank of India. The online payment services space remains bullish after reports that Alibaba is investing $550 million in Paytm, the largest online payment service platform in India.
The mobile wallet services space in India is witnessing high growth in the backdrop of a mounting number of smartphone users.
According to research firm eMarketer, India will have more than 200 million smartphone users, becoming world’s second-largest smartphone market by 2016. Only China will be ahead.
In the mobile wallet service space, MobiKwik competes with Paytm, Oxigen and Citrus in India. Through the mobile wallet, a pre-paid account can be created on the phone and money will be added. It can be used through net banking, card, or payments at retail outlets or transferring money.
“We are in discussion with multiple investors to raise $80-100 million and expected to close the deal in a couple of months,” said Bipin Preet Singh, co-founder & chief executive officer.
“We will make investments into technology and better products,” he added. The company will dilute about 25 per cent stake as part of fundraising at a valuation of $400 million (Rs 2500 crore). MobiKwik had raised less than $5 million in Series-A funding from a US-based VC firm in 2013.
“We are already established in the ecommerce space. Now we are expanding with offline business. About 100,000 point of sale (PoS) machines will be active by February where a customer can use the mobile wallet as offline. Also, transactions between a customer app and a retailer app with a one-time password are also underway,” he aded.
The company which claims to have 12 million registered users and 12 million transactions a month, has partnered more than 5,000 businesses across e-commerce, such as BookMyShow, Domino’s Pizza, eBay, HomeShop18, Infibeam, Jabong, MakeMyTrip, Naaptol, Pepperfry, redBus, Snapdeal, ShopClues, TastyKhana and Yepme.
“In India, the number of people using credit cards as well as online transactions through debit cards is small. They use debit cards mainly through ATMs and are generally like to pay as cash. Mobile wallet is a big opportunity where customers can be part of the large online financial system as anyone with a smartphone can open an account, which is easier than opening a bank account,” Singh added.
Major telecom service providers in India are also engaged in mobile wallet space through m-pesa (Vodafone), Airtel Money (Bharti Airtel), Mobile Money (Aircel) and mRupee (Tata Teleservices).
According to reports, Chinese giant Alibaba is all set to invest nearly $550 million in Paytm, leading online payment platform owned by One97 Communications Ltd, valuing the latter at $2 billion.