Bajaj Finance Buys 11% Stake in MobiKwik for Rs. 225 Crore – New Fund to Grow Merchant Network.


In a BSE filing, Bajaj Finance has picked up around 11% of stake in Digital Payments company Mobikwik for about Rs 225 crores. With this, Bajaj Finance has entered into a subscription agreement with the Gurgaon based One MobiKwik Systems.


India’s Second Largest Digital Payments Platform:

Digital payments company Mobikwik is divesting close to 11 percent of its stake to Bajaj Finance, which is a non-banking financial company (NBFC). In the process, it is raising Rs. 225 crores at an estimated valuation of about Rs. 2,000 crores. Prior to this, the company had raised about $80 million from investors including Sequoia, American Express, MediaTek among others. Bajaj Finance announced in a stock exchange filing on Wednesday that it had entered into a “Subscription Agreement with One MobiKwik Systems Private Limited (‘MobiKwik’) for the acquisition of 10 Equity shares and 271,050 compulsory convertible preference shares.”

MobiKwik was launched back in 2009 and has a base of 55 million users with 1.5 million registered merchants. It is India’s second largest Digital Payments platform, trailing behind market leader Paytm (who has a whopping base of 225 million users). MobiKwik also claimed to have a 250 percent growth in a total number of transactions on a year to year basis.

MobiKwik is now targeting a 100 million user base and a 10 million merchant base by the end of next year. It might be following the footsteps of Paytm, who itself has five million merchant base on its platform. So it appears that MobiKwik seems to be placing its bets in all the right places.

Like other digital payments services in the country, demonetization did play a big role in their recent success. Apart from the crazy growth, the business numbers have grown outrageously at the same time. Be it in terms of numbers or net profitable revenue, MobiKwik has done an incredible job in these last few months.

MobiKwik has always focused on their payments business, rather than expanding to other verticals unlike market leader Paytm (who is already into e-commerce, ticketing and many). The company can utilize the stake fund to grow their merchant base and will help them to expand their offices around the country.