MobiKwik, one of India’s leading fintech firms, would rather be a cockroach than unicorn

Happy at 10.
Happy at 10.
Image: Mobikwik
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In 2015, when Bipin Preet Singh and Upasana Taku got married, they carried their laptops with them to the ceremony. Their digital payments website MobiKwik was still in its early years and would often need rebooting. “Everyone who worked with us at that time was at the wedding. I was responsible for tech, so I had to carry my laptop everywhere,” recalls Singh.

That’s just the beginning of how life can be when your co-founder is also your life partner.

The duo has now spent 10 years building one of India’s largest digital financial services company backed by the likes of Sequoia Capital, Cisco, and Bajaj Finserv, among others. For the financial year ended March 31, 2019, MobiKwik posted revenue of Rs184.6 crore ($25.72 million), its third straight year of a 100% year-on-year growth.

Now, the Gurugram-based company, which has around 400 employees, is working to turn profitable and get listed in the next two years.

In a conversation with Quartz, Singh and Taku spoke about MobiKwik’s early days, the crazy boom post demonetisation, and what it means to be partners in life and in business. Edited excerpts:

How did you both meet?

Singh: We met in October 2008. I had gone for a play and one of my friends asked me to help someone over the phone with directions. That’s when I spoke with her for the first time. She was running late, so I waited outside with her tickets. At that time, I did not know that she is always late.

After the play, we went for drinks with some of our friends and started talking. Both of us are the same age so we were in the same frame of mind. We had worked for about five years and had an itch about what we would do next. She had just returned from the US and wanted to contribute to society. I was in the semiconductor industry and had a sense of underachievement in what I was doing.

Who’s idea was MobiKwik and what was the inspiration?

Singh: I had thought and conceived the idea of MobiKwik even before I met her. I had started doing some work and built a very small team. I hadn’t quit my job, though. I was still not sure if I should jump into this full time. When we became friends and started interacting, Upasana told me that this is the time when you either do it, or you don’t.

So in June 2009, I quit my job. Six months later, she also joined MobiKwik.

The idea came to me when I studied some reports and wondered why people have to go to a store for all their mobile recharges. Why were we wasting so much time? So, I thought there should be a website where this can be done. I had a friend who helped with the design and another who built the backend.

What were the first few months of running MobiKwik like?

Singh: On Aug. 9, 2009, MobiKwik went live.

The start up ecosystem was very small. We learned everything by making mistakes. For instance, we believed that if you make a website, people will come on their own. That doesn’t happen. So over time, we learned that you need to bring traffic through advertising or search engine optimisation (SEO), etc.

On the first or the second day, somebody tried to do a transaction of Rs50,000. In one way, I was happy that somebody was trying to do that big a transaction, but then we realised that something was wrong because we weren’t selling anything worth that much. It was likely a stolen card or somebody trying to abuse something.

We were always tracking the number of users and the number of transactions to make sure our systems were holding up. The initial systems were not designed for scale, so they would often go down. I remember going to a movie with my laptop because there was nobody else who could restart the server if the website went down.

“We started dating each other and we got married in 2011, which is less than two years after we started MobiKwik.”
Image: Mobikwik

How was it to work on a startup with a person you were first dating and then got married to?

Singh: That’s a part of our story. We started dating each other and we got married in 2011, which is less than two years after we started MobiKwik. For both of us, it was the start of a new chapter of our lives, personally as well as professionally. Our lives became completely intertwined. We had this huge amount of mutual respect as well as this crazy belief that we could change the world. It’s very hard to find a person who believes in you. Of course, we have gone through lots of ups and downs as well and there are lots of disadvantages of working with your life partner. Not to be recommended at all.

What would you recall as the first milestone for MobiKwik?

Taku: In 2011, we decided to stop working at home and get a proper office. So we took up a five-bedroom apartment on the ground floor of a residential society in Dwarka, Delhi. In the beginning, we were five teammates with one room for each of us. But within a year, we had fully filled the apartment. We were still self-funded because we did not have that much spending. We had started making around Rs2,00,000 a month at the time, and we were paying very low salaries in the range of Rs20,000-30,000.

Singh: Then, I met a friend who told me about this agency that I could hire who could do SEO for me. We started working with them and by early 2012, we were growing like crazy. We work with that agency even today.

A lot of competition came up in the digital payments space after you started. Were there some decisions you took just to catch up with peers?

Singh: We had started seeing that in stores, cards had picked up. So that’s how we thought we should go offline and offer MobiKwik at coffee shops or stores. There were already other companies that were doing that. That also got us thinking. But there was original thinking in terms that if we wanted to cover the lifestyle of our customers, this has to become ubiquitous. We realised that the cost of acquiring a customer is high, but once the customer is on board, then the opportunity to do more is higher.

The big moment for fintech in India came on Nov. 8, 2016, when the Indian government announced demonetisation of two high-value currency notes. How was that day for you and what happened in the weeks that followed?

Singh: We were stunned and it was crazy. We didn’t have an idea. Upasana and I had just come back from a vacation and I was watching the news, and we were just wondering what does this even mean? The next thing we knew was that there was suddenly so much attention and growth in traffic. Our website and app started going down. We started to deploy more servers. We started hiring people like crazy asking them to go and give out our QR code to merchants so that they can accept payments. We started getting so many inbound requests from merchants to join MobiKwik. It was like everybody in the country wanted to join a payments company.

Within a month of demonetisation, we must have easily hired 150-200 new people. A lot of them were part-time, and many were full time. That momentum easily lasted for about six months for us.

In retrospect, many economists have criticised demonetisation. Did you see any adverse impact of the move on your business?

Singh: Demonetisation distracted us from what we had planned to do before it came.

We always believed that payments for us was a very good customer acquisition channel but we were clear that we were not going to make a lot of money from just payments. So, we had thought that because we had so many customers, we would start building a loan product, something like a digital credit card on our app. There were some startups in that space who had just started out in 2016 and now they are much bigger.

We got our focus back on digital lending only by the middle of 2017. We built a data science team because the first step is to create a credit score. Without that, how can you start giving loans? Around February this year, we started giving loans.

MobiKwik 1.0 was until we raised our first round of funding, MobiKwik 2.0 was everything we had done around demonetisation, and MobiKwik 3.0 was the start of financial services and loans and now we’re getting into insurance also.

So what’s next in MobiKwik’s journey?

Singh: In August, we turned profitable (at an operating level) in the overall business on the back of growth in the digital credit card business. It’s a milestone in our space to get to this. There is not much gap between operating profits and net profits for us. For the year ending March 2020, we will post single-digit losses. For us, this is a very significant milestone, simply because it proves that our company can stand by itself and one day, in the next 24-30 months, it can become a public company.

Have you started an IPO process already?

Singh: We have not yet started the process, but we have certain milestones. We want to, for the next year, start acting and behaving like a listed company.

Public investors care about two simple things primarily: profits and growth. We have demonstrated that we can grow 100% plus year after year. What we had not demonstrated so far was, can we become profitable. Now we are doing that also. It’s going to take a little more time for us to become hugely profitable because we will continue to keep investing in growth as well.

This year, what we did was, every business head and the team sat down for a week or two to crunch numbers. They all came up with numbers they said they could achieve. So, by September, we were already beating whatever we had projected. We have already crossed the revenue run rate we had projected for the entire year.

Are you planning an IPO in India or in the US?

Singh: Listing in the US has its own advantages and disadvantages. The advantage is that if a loss-making company went there, people will still look at them and say there’s a lot of growth. But the other thing is how much time would some analysts spend trying to understand the Indian ecosystem or an Indian company? Another thing is we are a capital-efficient company. We are going to touch $100 million in revenue in the next six to eight months, and we have raised less than $100 million.

We raised series A after working for four years, and we were profitable at that time. Of course, we raised money and then it became unprofitable because we started investing. We have had offers for hundreds of millions of dollars, especially after demonetisation. But we raised money from Bajaj Finance in 2017 because we felt here is an Indian company that’s so well respected, and is profitable and listed.

Upasana, I, and our team own close to 45% in MobiKwik. Name any other company that is at our stage where founders hold that much stake.

There’s a trade-off when you start working towards profitability because you cannot invest too much in growing the business. Are you comfortable with that?

Singh: Attracting money is difficult but returning money is much harder. Look at the state of exits in India. Flipkart is a huge exception.

We don’t want to be in a position where we needed to get lucky. We want to control our future. It would have been great if we could also do it in a bigger way, but that also happens with its own challenges. It looks very nice from the outside, but for every dollar you take, you have to return three. So if you take a billion dollars, you have to return three billion. Most successful companies are those that are built with less capital. Look at Google, Intel, Facebook, and WhatsApp. History will tell you that there are no companies that have raised lots of dollars and been super successful in the long run. That’s because if the business model means losing money every quarter, then whether you are private or public, somebody has to fund it. And that patience, you can have from investors for some time, but eventually, you have to turn the money.

But doesn’t being a unicorn or the largest player mean something to you?

Singh: I have seen so many unicorns in India fall. I have seen so many unicorns in the US and China fall. I would much rather be a cockroach than a unicorn. A cockroach doesn’t give up. Be frugal and build a company that is profitable and create value using products and innovation. It’s very easy to create value using capital. But history also says that you can’t build value by just putting dollars.

And I don’t think all this has happened by design. If our competitor has raised $2 billion from Softbank, everyone tells us that we can’t give you money because how will you compete with them? That has then forced us to find what will be our path that will build this company in a different way.

With due regards, Paytm is much bigger. They have done a commendable job. And what we are building today is very different from what they’re building. Some parts are overlapping. We don’t need to be the largest payments company in India. That’s not our business.

Do you think you have changed as a person in the last 10 years?

Singh: Massively. I used to be very combative. I would fight for everything like what he/she said, what he/she did, why an investor invested in something, etc. Both of us used to think as if everything is either for you or against you. Over a period of time, we realised that doesn’t work. Right now, there are so many startups running in Gurgaon, and all these entrepreneurs are my friends and are on my WhatsApp. Sometimes, I have hired folks from their companies, sometimes my critical folks leave and go work for those companies. Sometimes a critical person could leave and join a competitor. In an earlier avatar, we would think that what we have built is so super-critical, how dare this person go there? And we need to hold a grudge, etc. Eventually, we figured out that you need not do that. You need to be aggressive but focus your aggression towards a positive direction.

Do you think it’s a good idea for a married couple to startup together?

Taku: I think it depends on what kind of a couple you are. If you are able to manage with your partner having completely opposing views to you and independent thinking, and you are able to give them that space then it is possible. Often times startups die down even if the business flourishes because the co-founders had differences, and this happens even if you’re not related to each other.

It’s high-stakes gambling. It’s all in. Either you’ll win it or lose it. You have to have the perseverance and patience to play out the entire game.

Singh: At the stage of life where we met and our relationship started, we were both 29, and we have been fighting since day one, so it’s not a new thing. If you suddenly start fighting, then it’s a problem.

Would you advise it to others?

Singh: I wouldn’t. It’s too much stress and too much risk. One of the things we encountered when I went to China for fund-raising is that they really frown upon married couples doing business together because there’s a 70-80% divorce rate and then investors think the company is going to suffer.

If you look at it from a practical point of view also, for example, taking a vacation. It’s tough to take a longer vacation with both of us away.

But that said, if your spouse is your partner, the highs are higher and the lows are lower.

This is part of a series of Q&As tracing the journeys of startups that have become household names in India. You can read all the interviews in this series here.