MobiKwik, an online payments startup, has raised Rs 225 crore in its latest funding round from Bajaj Finance. In an announcement, Bajaj Finance said that it has “entered into a Subscription Agreement with One MobiKwik Systems Private Limited (‘MobiKwik’) for acquisition of 10 Equity shares and 271,050 compulsory convertible preference shares (CCPS).”
The financing company also revealed that the value of the transaction is approximately Rs 225 crore. It also said that the conclusion of the transaction is subject to fulfillment of certain conditions in due course.
Bajaj Finance has also entered into a shareholders agreement which would become effective on conclusion of the transaction. Post conversion of CCPS, Bajaj Finance would hold approximately 10.83% of equity in MobiKwik on a fully diluted basis, approximately valuing it over Rs 2,000 crore.
MobiKwik was founded in 2009 by Bipin Preet Singh and Upasana Taku as an online platform for recharging and paying bills for mobiles and satellite TV connections. In 2013, it received a licence from RBI to launch its own digital wallet.
The digital payments startup, which is currently competing against the likes of Paytm and FreeCharge, claims to have 55 million users and 1.5 million merchants. It also claims that the company is growing at 250% year-on-year.
So far, the startup has raised around Rs 509 crore ($80 million) from investors including Sequoia Capital, American Express, Tree Line Asia, Cisco Investment, and Mediatek.
As per the company’s CEO Bipin Preet Sing, the company has been in the market to raise its fourth round of funding at a valuation of $1 billion.
Going forward, MobiKwik plans to lend money and provide insurance to its users, including merchants, as it seeks to “become a one-stop shop for all financial solutions”. It is looking to begin with the auto insurance and cashless mediclaim segments.