‘We refused to raise more money just to burn it faster’

The digital payments market is a crowded one, but Mobikwik co-founder Bipin Preet Singh says he unfazed by competition from players backed by large technology investors like Softbank and Alibaba, apart from Google and PayPal. He and his wife Upasana Taku started the company in 2009, and have weathered quite a few storms. The company has been expanding rapidly in the past year after demonetisation. Mobikwik may not be the market leader, but Singh says they are proud of the way they’ve built the company.


How did you decide to be an entrepreneur?

I’d worked in the semiconductor industry for seven years, and felt the work was not challenging enough. Around that time, I met Upasana who had returned to India after working with digital payments firm PayPal. Both of us felt we needed to change the course of our lives. The first idea was to enable online payments for mobile recharges, and we realized that the potential market was very big.

How did you start the company? What were the initial challenges?
The first three years were a struggle. We started the company in our apartment, and hired our first employee after a year. The second employee came on board after another year of slow development. We hired our first engineer after two years. We got an office only in the third year. Our first office was a DDA (Delhi Development Authority) flat in Dwaraka with a five-member team. We grew to 25 people in the same office, without external investments. In 2013, we started to get interest from venture capital investors. With the funding from Sequoia Capital, we moved to Gurugram in mid-2013.

What was the growth phase like?

We’ve been through three ups and downs. In 2011, the internet was breaking out but we were too small to exploit it. We managed to take advantage of the second boom in 2014. The second half of 2015 was tough as we needed more money. We managed to weather the storms, acquire good partners and reduce costs during tough times. We’ve always operated with a lean staff and moderate salaries. Our first five employees are stock millionaires. Upasana and I did not take salaries for three years.

During the early stage, was raising the bigger cheque the only factor to being number one?

Maybe yes. If we had access to more capital, we would have grown faster. But when I look back, I feel lucky to have built a company with more than 65 million customers and two million merchants. We refused to get into the rat race of raising more money to burn it faster. I want us to be a long-lasting financial sector player.

What is your strategy to scale? Do you see wallets becoming profitable?

In the Indian internet business, the lifetime value of a customer is low and the customer acquisition cost is high. We identify partners with a captive audience like banks or telecom players. Wallets themselves will not be a profitable business, even at scale. Merchants have adopted wallets in the last year, but as the industry grows, there are stringent regulatory requirements like KYC. Margins are shrinking. We can create loan, insurance and other products and follow a revenue-share model. We don’t want to become another payments bank. It is operations-intensive. Our partners are willing to work with us. We see ourselves as mobile fintech player and more value can be created thus.