Assets Under Management AUM

MobiKwik launches investment product Xtra, scales AUM to over Rs 100 crore

Digital payments company MobiKwik is bolstering its financial services offering with the launch of an investment deposit product called Xtra for its consumer and merchant partners.

The company already has assets under management (AUM) of Rs 101 crore for the product, co-founder Upasana Taku told ET in an interaction.

The product, which has been tested over the past month, allows users to invest as little as Rs 1,000 and seeks to offer interest of up to 12% per annum on such deposits, with the option to withdraw the corpus at any time.

Deposits will be invested by a peer-to-peer Non-Banking Finance Company (NBFC) partner as loans to MobiKwik customers. MobiKwik partnered with P2P NBFC LendBox for the offering.

MobiKwik’s Xtra isn’t a new offering in the fintech space, with several other companies, including Cred and BharatPe, foraying into the P2P lending category in the past year. Last week, Cred announced it was investing $10 million in P2P NBFC Liquiloans, which powers its P2P lending product Credit Mint.

Liquiloans is also working with Cred on its Cred Cash line of credit product.

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“Most of the P2P investment products from other fintechs focus on certain consumer segments. We wanted a broad base to benefit from the feedback. We also offer returns of up to 12%, higher than some other fintech companies, with a low investment barrier to entry of Rs 1,000. We launched Xtra keeping in mind that traditional financial instruments such as term deposits offer interest rates of up to 6% currently,” Taku said.

She added that the company is confident of the returns to come as the deposits will be reinvested by Lendbox as loans to its customers on MobiKwik. Currently, MobiKwik offers instant loans and buy-it-now-pay-later solutions to its users.

For the year ending March 31, 2022 (FY22), credit revenue accounted for nearly 25% of MobiKwik’s overall revenue. However, in recent months, credit has already reached 50% of MobiKwik’s monthly revenue this fiscal year, Taku added.

Earlier this month, MobiKwik announced its fiscal results for FY22. It reported an 80% increase in revenue to Rs 543.2 crore, while losses increased by 15% to Rs 128.16 crore from Rs 111.3 crore in FY21.

“For this fiscal year (FY23), financial services (including credit) will be 50% or more in terms of contribution (to overall income). And in the next fiscal year, it will definitely exceed payments.

The GMV (gross merchandise value) of payments is also growing. It increased by 130% between FY21 and FY22. But the margins in this business are low, especially compared to financial services,” Taku added.

MobiKwik claims 130 million users and 3.7 million merchants on its platform.

The company stalled on its initial public offering (IPO) plans amid a broader correction in fintech valuations.

MobiKwik received approval from the capital markets regulator, the Securities and Exchange Board of India (Sebi), in October last year to go ahead with its Rs 1,900 crore IPO.

Recently, the Reserve Bank of India (RBI) reportedly rejected MobiKwik’s request to operate Zaakpay, its payment gateway service, as a payment aggregator. ET reported on September 2. Taku said the company would reapply for the license.

ET reported on July 28 that RBI has opened another window for payment aggregators to seek regulatory approval, as shutting down unlicensed ones could cause disruptions in the system.

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