MobiKwik Is More Than Just A Wallet: Co-Founder Upasana Taku
The MobiKwik story so far, from apartment offices to venture capital funding.
What began seven years ago as an online service to make bill payments easier has now morphed into a mobile wallet that will soon begin offering its users credit on purchases.
MobiKwik was founded by Bipin Preet Singh and Upasana Taku in August 2009.
“So when we started out we had a website,” said Taku in an interview with BloombergQuint. “The website allowed you to create a wallet, put money in the wallet, and add money using a debit card or credit card or net banking. And you could use that wallet to make bill payments, whether it’s electricity or phone or television. That’s all you could do.”
Bootstrapping
The word “bootstrapping” is now commonly used by startups when they describe the period before they secure funding from angel investors or venture capital funds. It is the process of setting up an enterprise with minimal resources, usually cobbled together by the founders.
MobiKwik spent nearly half its existence doing just that.
The first three years were the ‘bootstrap’ stage. So we actually bootstrapped, we didn’t raise any capital.Upasana Taku, Co-founder, MobiKwik
At the end of those three years, though, Taku said, the company had broken even, had 35 employees, and was working out of two offices. The offices in question were two adjoining apartments, one with five bedrooms and another with two.
BloombergQuint could not independently verify the financial performance of MobiKwik.
“And we funnily called them ‘Tower 1’ and ‘Tower 2’. ‘Aaj meri Tower 2 mein meeting hai’... that kind of thing,” said Taku. Those were also the times when the employees took turns to brew tea and make Maggi.
The High Growth Phase
In September 2012, MobiKwik launched the first rendition of its mobile application on the Android store. Not too long after, it attracted the interest of venture capital fund Sequoia Capital. Since then, it has raised $80-85 million from investors in three rounds of funding.
The investors include American Express, Cisco, Tree Line Investment Management, GMO, MediaTec, and most recently South Africa based NET1.
“We’ve closed Series A, B, C, and now we’ll work towards Series D (funding),” said Taku. “We’ve just raised funds, but I think we’ll raise funds again. Early next year (2017) is when we’re planning to start the process for Series D.”
Between 2013 and 2015, the second stage of growth according to Taku, the focus shifted to building the team. During that time, the strength of the organisation rose to 100-120 people and it also moved to a more organised office space.
“And now this is the next stage I think. We’ve been growing like crazy for the last three-four years. I can tell you that a company that is not taking off is a problem, but a company that’s really taking off is also a problem for founders because you don’t know, there’s no degree that teaches you how to take your company through so many stages,” said Taku.
Product Offerings: What’s Next?
From only supporting bill payments and mobile recharges, MobiKwik now supports user-to-user transfer of funds, and most importantly, has 120,000 merchants on board. Users can buy a variety of goods from these merchants using the MobiKwik application in both online and offline transactions.
Currently, MobiKwik has 32 million users, but Taku aims to more than double the user base to 70 million next year, and to 150 million by 2018.
“Last year this time we were at around 12 or 14 million users. The year before, we started the year at I think 2-3 million users,” she said.
Around half of the 1.5 million daily transactions by these MobiKwik users are with merchants.
“There are two lines along which we are working right now: enable users to shop more and more offline and online, perhaps even by some deals, introduce them to merchants, and then there’s a whole fin-tech thing that we’re building out, whether it’s loans or investments,” said Taku.
MobiKwik aims to start offering short-term loans on its application, but hasn’t yet launched this feature.
“We’re still looking. We’re still defining two or three different products. And the idea is how can we get users who are otherwise not able to get short-term or small ticket credit,” said Taku. “We’ve not yet launched it. MobiKwik would be the front-end, and an NBFC (non-banking finance company) partner would disburse the loan.”
Will Mobile Wallets Surivive the Banks’ Onslaught
Lately, mobile wallet companies have had to contend with competition not just from each other, but also from banks. Both private and public sector banks are spending more on digital innovation in order to tap the burgeoning “millenials”.
So will mobile wallets continue to stay relevant after banks get their act together with mobile applications that ride the National Payments Corporation of India’s Unified Payment Interface?
Monish Shah, senior director at Deloitte thinks so, at least in the near term.
“Mobile wallet providers have traditionally gone after the volumes,” said Shah. “Now given the under penetration of digital payments, volumes are likely to remain attractive in the near term. But going forward, with more banks entering the fray and the wallet space getting overpopulated, mobile wallets will have to offer a very good value proposition to continue to do well.”