With players like Paytm, Mobikwik, and PhonePe launching new services and features every day to outdo each other, digital payments space is laden with intense competition.
However, as much as these services help fight competition, they dry up funds at a faster pace.
Mobikwik, one such comprehensive digital payments major, had not been in any fundraising reports since last year. But, as per sources, the company has raised a little over $3 million (about Rs 24 crore) in a bridge round from existing investors.
“Sequoia Capital has led the round with Rs 15 crore worth contribution, and two other existing investors – Net1 UPES and GMO Venture Partner – have also participated in the round,” said two sources on condition of anonymity.
Prior to this, the Bipin Preet Singh-led company had secured Rs 225 crore ($35.4 million) from Bajaj Finserv (NBFC) last year. Including this round, the company has raised a little over $118 million altogether.
Entrackr has reached out to Mobikwik for confirmation. We will update the post as response comes in.
It is clear with this small bridge round that Mobikwik is trying to raise a large round. In fact, the company had been eyeing a $60 million for about a year. The aim behind that aspired to fundraise was to launch several financial services like personal loans, insurance, and zero interest loans.
“The company hadn’t been able to score the projected amount, but due to the competition could not afford any delay in launching these services,” revealed the aforementioned sources.
The bridge round comes on the heels of Mobikwik launching instant loans services and providing insurance policies to the customers. Two months ago, it had also acquired Clearfund to enter into wealth management segment.
Expansion in services cost money. And since there is quite a delay in the incoming of planned funding, the company has to resort to bridge rounds and layoffs are also expected to keep up with the expenses.
Overall, it will be interesting to see how Mobikwik manages to fight the tough competition it faces from rivals like Paytm and PhonePe till it raises larger funds.