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MobiKwik is looking to raise INR 1,900 Cr from public market through mix of issuing fresh share and offer for sale

American Express, Sequoia Capital, Tree Line Asia, along with MobiKwik’s founders will offload shares

Founders Bipin Preet Singh and Upasana Rupkrishan Taku hold a total of 34.51% stake in the startup

Gurugram-based One Mobikwik Systems, the parent company of digital transaction platform MobiKwik, has filed a DRHP with market regulator SEBI and is eyeing to raise INR 1,900 Cr from the public market. MobiKwik will raise money through issuing fresh shares worth INR 1,500 Cr and offloading equity shares aggregating up to INR 4,000 Cr.  

Founded in 2009 by Bipin Preet Singh and his wife Upasana Taku, MobiKwik started as a digital wallet but gradually forayed into a horizontal fintech platform that now offers services such as credit, insurance, and gold loans among others. The startup was last valued at $700 Mn after it raised $20 Mn (INR 150 Cr) in June this year from Abu Dhabi Investment Authority (ADIA). 

As per the DRHP, Mobikwik’s revenue from operations fell by 18.7% to INR 288.5 Cr in FY21 from INR 355.6 CR in the previous year (FY20). The company posted a total income of INR 302 Cr in the March ended financial year, a drop of 18% from INR 369 Cr that was recorded in FY 20.  

Mobikwik’s loss further widened to INR 110.9 Cr in FY 21, an increase by 11.9 % from INR 99.1 Cr it posted in the previous financial year. MobiKwik’s total expenses fell INR 404 Cr in FY21 as compared to INR 454.4 Cr in FY20. The fintech company’s employee benefits expenses fell to INR 53 Cr in FY 21 as compared to INR 65.6 Cr that it posted in FY 20. 

As per the DRHP filing,  American Express will be offloading its shares up to INR 9.9 Cr, whereas Bajaj Finance will offer equity shares worth up to INR 68.9 Cr for sale. Cisco Systems and Sequoia to offload shares worth up to INR 11 Cr and INR 94 Cr respectively. Treeline Asia will offer for sale of shares worth up to  INR 24 Cr.  The founders will be offloading the most as Singh will be offloading shares worth INR 111 Cr whereas Taku will offer for sale worth up to INR 78 Cr.

Founders and promoters Bipin Preet Singh and Upasana Rupkrishan Taku hold the largest share in MobiKwik with 20.21% and 14.3% respectively, thus owning a total of 34.52% stake in the startup. The biggest investor in the fintech company’s cap table currently is Sequoia with 17.25% stake, followed by Bajaj Finance at 13.8%, Net1 Applied Technologies at 10.79%, Tree Line Asia at 4.43%, Abu Dhabi Investment Authority at 2.89%, Cisco Systems at 2.08%.

The remaining shareholders in the company own less than 1% stake and their cumulative holdings amount to 14.18%. A total of 13 investors with more than 1% or more equity shares own 91.25% of the company. 

Mobikwik ahead of its initial public offering just like ixigo had also appointed four independent directors – Dr Punita Kumar Sinha, Ex-MD of Blackstone and Oppenheimer, Navdeep Singh Suri, Ex-MD of Blackstone and Oppenheimer, Sayali Karanjkar, cofounder of PaySense, and Raghu Ram Hiremagalur, CTO of LinkedIn. MobiKwik earlier this year was mired up in controversy for the alleged data leak.

In March, reports surfaced that data of over 100 Mn Indian MobiKwik users’ remained unexposed. Independent cybersecurity researcher Rajshekhar Rajaharia earlier had reported records for 11 Cr MobiKwik users with 8.2 Tb of data were breached.

The startup in its DRHP filings revealed that a critical element of its business is the ability to mitigate risk associated with buy now pay later (BNPL) operations, including identification of suitable users, appropriate underwriting, and development of a visible and efficient collection strategy. MobiKwik said that it collects data beyond traditional credit scores, including spending patterns, device information, location history and mobile application usage.