MobiKwik launches investment product Xtra, scales AUM to over Rs 100 crore

The company already has assets under management (AUM) of Rs 101 crore for the product, cofounder Upasana Taku told ET in an interaction.

The product, which has been tested over the past month, allows users to invest as little as Rs 1,000 and looks to provide interest of up to 12% per annum on these deposits, with an option to withdraw the corpus at any time.

The deposits will be invested by a peer-to-peer non-banking financial company (NBFC) partner as loans to MobiKwik customers. MobiKwik has partnered with P2P NBFC LendBox for the offering.

MobiKwik’s Xtra is not a new offering in the fintech industry, with several other firms including Cred and BharatPe foraying into the P2P lending category last year. Last week, Cred said it was investing $10 million in P2P NBFC Liquiloans, which powers its P2P lending product Credit Mint.

Liquiloans is also working with Cred on its credit line product Cred Cash.

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“Most of the P2P investment products from other fintechs are focused on select segments of consumers. We wanted a large base to benefit from the returns. Also we are offering upto 12% returns, higher than certain other fintech firms, with a low entry investment barrier of Rs 1,000. We have launched Xtra keeping in mind that traditional financial instruments such as fixed deposits offer interest as high as 6% at present,” said Taku.

She added that the company is confident of the returns coming in since the deposits will be plowed back by Lendbox as loans to its customer base on MobiKwik. At present, MobiKwik offers instant loans and buy-now-pay-later solutions to its users.

For the year ending March 31, 2022 (FY22), revenues earned from credit comprised almost 25% of MobiKwik’s overall revenues. However, over the past few months, credit has already scaled to 50% of MobiKwik’s monthly revenues during this fiscal, Taku added.

Earlier this month, MobiKwik
announced its fiscal results for FY22. It reported an 80% increase in revenues to Rs 543.2 crore, while losses increased 15% to Rs 128.16 crore from Rs 111.3 crore in FY21.

“For this financial year (FY23), financial services (including credit) will be 50% or higher in terms of (overall revenue) contribution. And in the next fiscal it will definitely exceed payments.

The GMV (gross merchandise value) of payments is also growing. It grew by 130% between FY21 and FY22. But margins in that business are low, especially compared to financial services,” added Taku.

MobiKwik claims to have 130 million users and 3.7 million merchants on its platform.

The company has stalled plans for its initial public offering (IPO) amid a broader correction in fintech valuations.

MobiKwik received approval from capital markets regulator, the Securities and Exchange Board of India (Sebi), in October last year to go ahead with its Rs 1,900 crore IPO.

Recently, the Reserve Bank of India (RBI) reportedly rejected MobiKwik’s application to operate Zaakpay, its payment gateway service, as a payment aggregator. ET r
eported on September 2. Taku said the company would reapply for the license.

ET
reported on July 28 that RBI had opened another window for payment aggregators to seek regulatory approval as the discontinuation of those without the license could lead to disruptions in the system.