PremiumInvestors will have to wait for 500-600 million Indians digitally transacting to see the magic happening and all the valuations will come but they have to invest now, said Upasana Taku, Co-Founder, MobiKwik
NEW DELHI : India’s fintech industry has seen progress in the last 10 years but it needs investors to put in more money now to get the kind of valuations they aspire to, said Upasana Taku, Co-Founder, MobiKwik at the Mint India Investment Summit 2022.
“Investors will have to wait for 500-600 million Indians digitally transacting to see the magic happening and all the valuations will come but they have to invest now," she said.
Today, 300 million Indians are transacting digitally, she noted. “When we started 10 years ago 10 million used to transact digitally. We have come a long way since then yet we have only touched the tip of the iceberg," she added.
India was the third largest fintech market in the world at $31 billion in 2021 after the US and China, according to a report by Mumbai-based VC firm BLinC Investment Management. The fintech sector is expected to grow with a compound annual growth rate (CAGR) of 22% in the next five year, the report added.
Taku said India has the potential to become the largest fintech market in the world in the next 5-10 years.
India is home to over a billion people but only about 50-70 million of them have access to credit, while the number of people who have access to insurance and savings products is sub 10%, she noted. “So, there is 90% market available to be tapped and there are many players available so if there is a sector investors should go long then it should be fintech," she added.
She said India’s fintech market did not grow as fast as China’s because Indian regulators have been on their toes to draw up regulations for any developments in the industry.
“In China when the fintech revolution came the regulatory framework was not great so they got a free hand. In India, that was not the case. For instance, from the beginning, although the number of P2P (peer to peer) lenders is small and the scale is not substantial, the guidelines were well documented to regulate them," she explained.
She said investors cannot expect profitability from day one and that they should allow companies to grow too.
“What the investor should look at is founders and team that have the right fundamentals and where they are trying to build a business which scales at positive contribution business margin," she said.
Taku said that in the December quarter, MobiKwik achieved cash breakeven for the first time and is expected to remain positive not only in the ongoing March quarter but in the next financial year as well.
Taku reiterated that MobiKwik will launch its initial public offering after the markets stabilises.
In July 2021, MobiKwik, backed by Sequoia Capital and Bajaj Finance, filed for an IPO of up to ₹1,900 crore with Sebi.
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