MobiKwik launches investment product Xtra, boosts AUM to exceed Rs 100 crore

• ByStartupStory     |    September 19, 2022

MobiKwik is extending its financial services portfolio by introducing Xtra, an investment deposit product for its consumer and merchant clients. In an interview with ET, the company’s assets under management (AUM) for the product are now worth Rs 101 crore, according to the product’s cofounder, Upasana Taku.

The program, which has been experimented with over the last month, enables consumers to invest as little as Rs 1,000 and aims to provide annual interest rates of up to 12%, with the opportunity to withdraw the principal at any time.

A peer-to-peer non-banking financial business (NBFC) partner will invest the deposits as loans to MobiKwik clients. For this product, MobiKwik has teamed with P2P NBFC LendBox.

MobiKwik’s Xtra is not a new product in the fintech business, as many other companies, such as Cred and BharatPe, entered the P2P lending market last year. The previous week, Cred announced a $10 million investment in P2P NBFC Liquiloans, which underpins its P2P lending product Credit Mint.

“Most of the P2P investment products from other fintech 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 highlighted that the company is guaranteed future returns since Lendbox would reinvest the deposits as loans to its customer base on MobiKwik. Currently, MobiKwik offers its consumers immediate loans and buy-now-pay-later choices. For the fiscal year ending March 31, 2022 (FY22), credit score revenue accounted for nearly 25% of MobiKwik’s total revenue. Nonetheless, during the last several months, credit score has already reached 50% of MobiKwik’s monthly income for the current fiscal year, Taku said. This month, MobiKwik released its financial results for FY22. Its sales increased by 80% to Rs 543.2 crore, but its losses increased by 15% to Rs 128.16 crore from Rs 111.3 crore in FY21.

MobiKwik says that its platform has 130 million users and 3.7 million merchants. The company has put off plans for its initial public offering (IPO) because the value of fintech companies as a whole is going down. In October of last year, the Securities and Exchange Board of India (Sebi), which is in charge of the capital markets, gave MobiKwik permission to go ahead with its Rs 1,900 crore IPO.

The Reserve Bank of India (RBI) is said to have turned down MobiKwik’s request to use its payment gateway service, Zaakpay, as a payment aggregator. ET reviews came out on September 2. Taku said that the business would try to get the license again. ET reported on July 28 that the RBI had given payment aggregators another chance to get regulatory approval because shutting down those without a license could cause problems in the system.

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