03 July 2017, India:
In a BSE filing, Bajaj Finance announced that it has entered into a subscription agreement with One MobiKwik Systems. Under the agreement, it will acquire 10.83% equity shares and 271,050 compulsory convertible preference shares (CCPS) of Mobikwik. The indicative time period for completion of this acquisition is 30 days.
Rajeev Jain, Managing director, Bajaj Finance Ltd, said, “We aim to combine the synergies of both the organizations – deep-rooted customer analytics and extreme focus on digital-oriented eco-system will make this a disruptive proposition amongst our existing products. Bringing in debit and credit option in one app will facilitate stronger customer convenience, stimulating higher spends.”
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Bipin Preet Singh, MobiKwik CEO said the deal will enable the company to realize its vision of performing all the functions of a bank yet retain its core competency of being an e-wallet. “In short, Mobikwik transforms itself as a new-age bank where our digital transactions will lead to lowering of lending rates and increased supply of money in the Indian economy,” he said.
Founded in 2009 by Bipin Preet Singh and Upasana Taku, MobiKwik is an unlisted private company which had a turnover of Rs 38.07 crore in 2015-16. The company currently operates as a semi-closed wallet providing mobile, DTH and internet recharge, payment utility bills, payments for the purchase of goods or services from specific online and offline merchants, payment gateway. Mobikwik has so far raised over $85 million in funding from investors like South Africa’s payments major Net1, Sequoia Capital, American Express, Tree Line Asia and Cisco Investments.
Recently, Private sector lender Axis Bank sealed the deal and acquired Freecharge for $60 Millon. Freecharge was at its peak in 2015 with a valuation of $400 Million. It hit a roadblock last year when it failed to capitalize demonetization. Rival, Paytm went in all guns blazing and its fortune turned overnight as the company scaled new heights.