MobiKwik enters wealth advisory space with Clearfunds acquisition

This is the first acquisition of the Gurgaon-based startup, which said it has earmarked $15 million to scale up its wealth management business.

Payments company MobiKwik on Thursday announced its entry into the wealth management business with the acquisition of Mumbai-based wealth management platform Clearfunds. This is the first acquisition for the Gurgaon-based startup.

In a statement, MobiKwik said that it will be investing $15 million over the next year to scale up its wealth management business. Through this acquisition, the MobiKwik platform will allow its customer base to start saving in mutual funds seamlessly from the app.

The company also said that post the acquisition, Kunal Bajaj, the founder and CEO of Clearfunds, will lead MobiKwik’s wealth management business. Founded in 2016, Clearfunds is a direct mutual fund investment platform that uses analytics and automated processes to deliver investment experience at the lowest possible cost.

Its 'Smart Portfolios' feature is a fully automated investment advisory service designed to make investing easy for everyone. Prior to the acquisition, Clearfunds already had close to $45 million worth of Assets Under Advisory and its platform allowed clients to access over 3,000 direct mutual fund schemes across all 36 mutual fund companies and four registrar and transfer agents (RTAs).

In a statement, Upasana Taku, co-founder and Director, MobiKwik, said,

“This acquisition will help us get a head start in the wealth management domain. Clearfunds has done exceptionally well in a short span of time and has an edge over its competitors, owing to its superior technology know-how and advanced data analytics. MobiKwik users will now be able to start their investing journey with as little as Rs 100. This is the first-ever acquisition by MobiKwik as we look to build out our full-stack fintech platform and deliver more financial products to our 107 million plus customer base. We will continue to look at strategic investments or acquisitions that can add value to our business.”

Kunal Bajaj, founder and CEO, Clearfunds, said,

“We are confident that with this acquisition, we will be able to take wealth management to millions of Indians located across the country, create awareness about the benefits of direct mutual funds and help them manage their investments better. I am confident that MobiKwik will be one of the frontrunners in the full stack digital financial services industry in the times to come.”

This news comes a month after MobiKwik’s rival Paytm launching its own dedicated wealth management app. Paytm Money, a wholly-owned subsidiary of One97 Communications Limited, is a direct mutual funds investment platform that has tied up with close to 25 asset management companies (AMCs).

Before the launch, Paytm Money claimed that it had more than 850,000 users registering for early access.

With the launch of the wealth advisory business, both Paytm and MobiKwik are now competing with Bengaluru-based brokerage firm Zerodha, which launched direct mutual fund platform Coin last year and has close to Rs 1,100 crore in assets under management.

Further, private players announcing their entry will help in the uptake of mutual fund distribution in the country. To get some perspective, in FY18 alone, the mutual fund industry added close to 8.32 lakh SIP accounts each month with an average size of around Rs 3,200.