MoneyOnMobile in talks to raise $40 million

The company will be diluting 10% of its equity as part of the fund-raising

Mobile payment solutions company My Mobile Payments, which owns m-wallet brand MoneyOnMobile, is in talks with private equity (PE) investors to raise $40 million (Rs 250 crore), managing director Shashank Joshi has told Business Standard.

"We will be sealing a deal by the end of March. We will be diluting 10 per cent of our equity as part of the fund-raising, at a valuation of Rs 1,500 crore," said Joshi.

The valuation has been done by merchant bankers Cipher-Plexus, which put the pre-money valuation at between Rs 1,250 and Rs 1,500 crore, and post-money valuation at Rs 1,750 crore. MMPL, which began operations in September 2010, received an investment of $29.7 million in MoneyOnMobile from Calpian Inc, a Texas-based company, in 2012.

Joshi said part of the funds would be deployed to provide mobile tablets to the company's retailers, to help them go digital.

The funds would also be used for technology upgradation, he added.

MoneyOnMobile has already reached 600,000 transactions a day, and these volumes could touch 1.5 million a day by the end of this financial year, Joshi noted. MMPL currently has a franchised retail network of 250,000 outlets, or 'touch points', that do a business of Rs 5.5 crore a day, compared with 160,000 touch points and Rs 3.5 crore-a-day business in 2013.

MoneyOnMobile's multilingual payment application, which supports 10 Indian languages other than English, and its card-less (credit cards, debit cards etc) transactions model, makes it stand apart from other players such as Paytm, in which Alibaba is investing $550 million, and m-wallet services provider MobiKwik, which is planning to raise $100 million from PE and strategic investors.

According to Joshi, MoneyOnMobile is focused on serving only the un-banked population in semi-urban and rural areas and would collaborate with two major e-commerce sites within the next two months. He added that MMPL had extended the MoneyOnMobile brand to the UK in August 2012 and launched MMPL UK, a project which had just completed its pilot and was ready to go live soon.

MMPL garnered revenues of Rs 1,000 crore in the last financial year. "We are expecting to close the current fiscal (FY15) with revenues of Rs 1,500 crore, and we anticipate to grow this to Rs 6,000 crore in the next fiscal (FY16), with the expected growth drivers being rail ticketing and money transfer services," said Joshi.