With high-profile investments from Alibaba and SoftBank fueling an impressive growth story since demonetization last year, you could be forgiven for thinking that Paytm has India’s payments market sewn up. But at least one company will agree to differ on that.
MobiKwik, the mobile payments startup that is number two to Paytm in India, is quietly confident that it can take advantage of its rival’s focus on e-commerce and recent entry to banking to even the playing field. To strengthen its case, MobiKwik, which is solely focused on payments, is in the process raising its largest financing from investors to date.
Co-founder Upasana Taku confirmed to TechCrunch that the company is in talks to raise $100 million-$150 million in a round that would value the company at more than $1 billion, thereby putting it into the elite club of tech unicorns. Taku declined to name the investors that her company is talking to, saying only that they include one major strategic investor and a number of financial institutions. She expects the round to close in the next couple of months. The plan is to invest as much as $45 million of the capital on growing user and merchant bases, and expand its current base of six offices to more than 20.
With Alibaba ploughing funds into Paytm and already holding a stake in Snapdeal, the scene is set for its arch rival Tencent — which recently invested in e-commerce giant Flipkart — to grab a piece of India’s payment landscape. Taku declined to comment either way when asked whether Tencent is among the investors that MobiKwik is negotiating with.
Investors aside, that valuation would be notable for MobiKwik, and India’s startup scene itself. The round could double MobiKwik’s funding to date, which stands at just over $125 million. However, it would remain the underdog in its battle. Paytm has risen to become India’s second highest-valued private tech firm — behind only Flipkart — with a valuation of $7 billion following a huge $1.4 billion investment from SoftBank and a $200 million round led by Alibaba.
Paytm and its parent company One97 have raised over $2.5 billion from investors. That’s pushed its business into e-commerce — where the influence of Alibaba is strong — furthered its mobile payment strategy, and seen it branch out into digital banking, via a yet-to-launch project that borrows heavily from…