The digital payments sector in India is booming but it also is a very competitive space with some deep-pocketed companies in the fray. MobiKwik co-founder Upasana Taku tells FE's Asmita Dey that the firm has launched new businesses and is on track to become the top digital credit card issuer in the country very soon. The company is also planning to raise funds up to $100 million to fuel its overseas expansion plans. Excerpts:
You launched your digital lending business last year. How is it faring? Has it gained enough traction?
There are only 25 million credit card users in India. Overall, only 6% Indians have had access to credit. One of the biggest challenges of the middle-income segment is that they have a bank account and debit card but are not getting served well by the existing banks as they need small-ticket loans. The thesis we came to is that there can be 100 million digital credit card users and we can be the issuer of those cards.
In the last one year, we have disbursed loans worth more than Rs 700 crore. We started with products as low as Rs 2,000. We have 800,000 users so far and we intend to take it up to 2 million soon.
There is a narrative that you have diversified into digital lending and other businesses like insurance because of the stiff competition in the payments segment. What do you have to say about that?
We are not giving up our market share in payments. But we are concerned about making money. Our new fintech portfolio (insurance, digital credit, wealth management) opens up an additional revenue stream for us.
About 75% of our revenues still come from the consumer payments business with financial services bringing in the remainder. We want 45% of our revenues to come from the financial services segment by early next year.
When do you hope to turn profitable? Also, what is your revenue target for FY20?
In August, we have turned EBITDA (earnings before interest, taxes, depreciation and amortisation) positive.
By FY21, we hope to turn profitable on a full-year basis. We are expecting to clock revenues of about Rs 500 crore this financial year.
How do you plan to scale up your fintech business?
We want to double down on the fintech business. We will be launching new products and make them available to more customers on our platform.
Are you in talks with investors to raise funds?
We are in no hurry to raise money. However, in the next couple of years, you will also see Mobikwik going to couple of other countries in the neighbourhood. For those growth aspirations, we may tie up with a strategic partner. We are looking to raise anywhere between $40 million and $100 million and it will be our last fundraise before we go for IPO (initial public offering).