MobiKwik Raises More Debt Funding as IPO Delayed

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MobiKwik raised small amounts of funding in tranches as part of its goal to raise $100 million. In addition, the company updated its ESOP (Employee Stock Ownership Plan).


BlackSoil and Bengaluru-based alternative investment fund Karnation have provided MobiKwik with total debt of Rs 55 crore since August, according to two different RoC (Registrar of Companies) filings.


MobiKwik’s Board of Directors has approved a resolution to issue 900 non-convertible debentures (NCDs) at an issue price of Rs. 5,00,000 each in two separate tranches of 700 and 200, respectively, to raise Rs. 35 crore and Rs. 10 crore of BlackSoil.


200 NCDs with a face value of Rs 10,000,000 each and a total value of Rs 10 crore were issued by Karnation, a CAT-II alternative investment fund registered with SEBI, in September.


The loan funding comes nearly 14 months after the fintech company’s previous funding round, which took place in June 2021 and was valued at $720-750 million.


Previously, the company struggled to find international institutional investors at the right price due to growing public distrust of fintech business models. The fintech company has also been advised not to go ahead with its IPO as it may be difficult to find adequate demand from institutional investors, both domestic and overseas.


In October last year, MobiKwik obtained clearance from the market regulator to launch an initial public offering (IPO) of Rs 1,900 crore ($255 million). 1,500 crores will be raised through a new issue, while the remaining 400 crores will be offered for sale by current shareholders. Sequoia Capital India, Bajaj Finance, American Express, Cisco and Abu Dhabi Investment Authority are just a few of the 11-year-old startup’s backers.


Following a postponed November 2021 IPO, news emerged in June 2022 that the company was in talks with investors to fund $100 million to expand its operations. Co-founder Upasna Taku previously told Bloomberg that the company still intended to go public “but at a more appropriate time.” For the time being, it will use the new funds for acquisitions, hiring and marketing.


MobiKwik has delayed its IPO plans since last year due to a lack of investor interest as well as concerns following the disappointing public listing of Paytm and other companies. MobiKwik is targeting an IPO valuation between $1.5 billion and $1.7 billion.


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