MobiKwik eyes profit in FY22 as it gears up for IPO this year

Financial technology startup MobiKwik said it is proceeding with its plan to list on the capital markets this year — a feat that will make it the first fintech major in the country to do so — and has already begun evaluating its initial public offering (IPO) options.

The startup had expected to turn a profit last year before the pandemic hit and lockdowns ensued. In fact, the fintech firm clocked its highest ever revenue in March and was on track for a turnaround to profit the next month, even by conservative estimates.

But the sudden drop in online consumer spending in April, when the lockdown began, pressured its top line.

"In 2021, we're still not growing that fast that we're able to overcome the five months of lockdown deficits," Mobikwik Co-founder Upasana Taku told YourStory in a video interview. However, the startup said it is eyeing profitability in fiscal 2022.

The current year is expected to be flat, with revenue of about Rs 400 crore and a loss between Rs 40 crore and Rs 50 crore. In 2022, Mobikwik expects to earn upwards of Rs 750 crore in revenue, and turn a profit of Rs 40-50 crore, as per its estimates.

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"The payments business came back right after Diwali last year," said Upasana. "Can't complain about the growth levels because we still did better than a lot of small businesses during the peak COVID-19 period."

Transaction volumes are back to pre-COVID levels, she said, growing up to 10 percent every month on the back of nearly three million customers joining the platform every month.

The next six-nine months are crucial for the startup as it prepares to list on the stock exchange via an IPO. Upasana said the company might raise a little bit of capital, pre-IPO, to ensure it has enough capital to "invest in the right areas and deliver quarter-on-quarter growth".