MobiKwik cuts cash losses by 91%, expects full year profitability in FY21

KEY HIGHLIGHTS

• MobiKwik is backed by investors such as Sequoia Capital India, Bajaj Finance, American Express and Net1

• FY 20 net revenue was Rs 379 crore; cash losses are down to Rs 9 crore

• Fintech and Wallet business segments lead the revenue growth

• Company has tied up with banks and others NBFCs to provide credit to users

Gurgaon-based fintech company MobiKwik, in its annual report, stated that the company has reduced its EBIDTA losses from Rs 112 crore in FY19 to Rs 45 crore in FY20. Cash losses were down to Rs 9 crore from Rs 98 crore last fiscal. The net revenue also grew over 133% from Rs 162 crore to Rs 379 crore for the same period. Last month of FY19 (March 2020) alone saw net revenue of Rs 38 crore, with cash loss of just Rs 8 lakh. Upasana Taku, co-founder of MobiKwik, said the losses have come down across all business verticals.

Backed by investors such as Sequoia Capital India, Bajaj Finance, American Express and Net1, MobiKwik's revenue streams are mainly from its three businesses - consumer payments (wallets), financial services (credit, mutual funds) and payment gateway via subsidiary Zaakpay.

"Often people keep saying if anyone makes money in the wallet business - MobiKwik is making money," says Taku. Wallets division, which has nearly 120 million users, saw revenue grow by 159% year on year to Rs 230 crore in FY20 against Rs 89 crore in FY19, while incentives grew only 30%.

"This to me demonstrates consumer loyalty to our platform," adds Taku. The company also struck new partnerships last year, including one with Google for mobile recharge search. It also tied up with Flipkart for 'MobiKwik Biller Stack', an enterprise product for e-commerce players, which now has been extended to five other internet companies .

In the fintech business, the company has joined hands with banks and others NBFCs to provide credit to users based on usage data on the platform. The credit is provided and disbursed only through the wallet.

"The digital credit in a wallet concept has resulted in an amazing performance for us," says Taku. Fintech business generated net revenue of Rs 91 crore in FY20 against Rs 29 crore in FY19. The Payment Gateway business Zaakpay, according to the company, saw net revenue rise to Rs 190 crore in FY20 in comparison to Rs 101 crore in FY19 on a standalone basis.

The company said while the number of employees has remained 300-plus in the last couple of years, the revenue per employee has gone up from Rs 0.4 crore last year to Rs 1.4 crore this year. With coronavirus pandemic also furthering the cause of fintech companies, "this could possibly the first full year of profitability for us," adds Taku.

Also read: Crackdown on Chinese imports: Amazon India makes 'country of origin' display mandatory