IPO-bound fintech startup Mobikwik turned profitable in the December 2021 quarter and is expected to close the current fiscal year with roughly two times revenue growth, according to a top company official.
Upasana Taku, co-founder and Chief Operating Officer (COO) of Mobikwik, stated that the company made a profit of about Rs 7 crore in the third quarter of 2021-22, after losing cash in the first and second quarters. “In the last quarter, the company achieved profitability for the first time. We expect to be profitable in the fourth quarter as well. We expect our full financial year (FY) of 2022-23 to be profitable. This really validates our theory and the message that we have been giving that it is possible in the Indian fintech space to build a fast pace growth model while at the same time make money,” she added.
Taku said that the company’s revenue for the nine-month period ended December 31, 2021, was over Rs 400 crore, representing 86 percent year-on-year growth. “Given this… we expect that we will be closing the year at Rs 550-600 crore which is two times our last financial year,” Taku said.
She also said that in order to accomplish Rs 300 crore in revenue in FY21, the company had a capital spending of Rs 98 crore, which is a negative 32 percent EBITDA (earnings before interest, taxes, depreciation, and amortization) as a percentage of revenue. The company posted overall losses of Rs 78 crore for the nine-month period, which is a negative of 19 percent, to achieve this Rs 400 crore.
She went on to say that there are existing financial institutions that make tons of money but only grow at a 20 percent pace, and then there are new-age fintech startups that grow at a rate of 100-150 percent but lose a lot of money. “I think this is the fine balance that Mobikwik as a late-stage, mature company is trying to straddle where we are able to showcase 100 percent revenue growth and at the same time reaching break-even,” Taku added.
The Gurugram based mobile phone-based payment platform earlier postponed its planned initial public offering (IPO) with concerns about high valuations and startup profitability closely associated. Taku, in January of this year, said IPO is a once-in-a-lifetime opportunity and that Mobikwik will not want to approach the market when it is performing erratically, opting to wait for the market to stabilize.