Digital payment solutions provider MobiKwik has bounced back in FY22 and crossed the Rs 525 crore revenue mark. While the pandemic had shrunk its scale to the tune of 20% in FY21, the Gurugram-based company’s revenue grew 82.6% during the fiscal year ending March 2022 (FY22).
MobiKwik’s operating income surged to Rs 526 crore in FY22 as compared to Rs 288 crore in FY21, according to the company’s annual financial statements with the Registrar of Companies (RoC). MobiKwik generates its revenue primarily from three segments: consumer payments, payment gateway services and Buy Now Pay Later (BNPL) financial products.
Importantly, MobiKwik has not given the revenue break-up in its filings.
The company also has other income, mostly from the interest from non-current investments which surged 22% to Rs 16.6 crore in FY22.
With 34% of the overall expenses, payment gateway expenditure emerged as the largest cost center for Mobikwik. This cost increased 51% to Rs 228 crore in FY22. Advertisement/promotion and employee benefit expenses were other vital costs that formed 17% and 16% of the total expenses. These costs increased by 30% and 102% respectively to Rs 113 crore and Rs 107 crore in FY22.
MobiKwik provides financial guarantees for bank loans taken by users on its BNPL platform and books related costs. Such expenses grew by 57% to Rs 91 crore in FY22. It runs the BNPL product Zip which claims to have over 25 million pre-approved BNPL users and an active user base of 2.8 million.
The Bipin Preet Singh and Upasana Taku-led firm also spent Rs 19 crore and Rs 18 crore on legal professional charges and lending operational expenses, pushing the total cost by 61.4% to Rs 665 crore in FY22.
Despite 82% growth in its scale, MobiKwik has managed to keep a tab on losses which grew 15.3% to Rs 128 crore in FY22 from Rs 111 crore in FY21. On a unit level, the company spent Rs 1.26 to earn a single unit of operating revenue.
Even as MobiKwik has demonstrated strong growth with control on expenses, it’s nowhere close to break-even. While the company is projecting a turn to profitability by FY24, it faces challenges on the regulatory front. The Reserve Bank of India (RBI) rejected its payment aggregator application as the company didn’t meet the net-worth criteria. It has reportedly filed a fresh application subsequently.
The company has put its IPO plans on ice for now as it weighs options for itself. With the dismal show from most startups including its fintech competitor Paytm, Mobikwik finds itself once again in the shadow of the former. With fundraising of some sort likely to be unavoidable for some time, the startup will be hoping that the market doesn’t turn any worse from here, as that could jeopardize funding for a much longer time.
