MobiKwik is one of the largest Mobile Wallet and Buy Now Pay Later (BNPL) platforms in India. Its tech platform has 120 million Registered Users, 25.3 million pre-approved BNPL users and more than 3.4 million merchant partners. MobiKwik’s top line grew by 80 percent from INR 300 crore in FY21 to INR 540 Crore in FY22.

Tune in to this conversation with Bipin Preet Singh, Co-founder, MobiKwik where we talk about his journey of building and scaling the company for the last 13+ years.

During the episode, Bipin also shares about how they started first with a basic problem of the masses with mobile recharge and then scaled over time, how they sailed through the difficult times of Covid and took Mobikwik to 100Mn+ users.

Notes –

02:21 – What led him to founding MobiKwik?

09:00 – “You can’t build the platform on Day 1, the platform has to evolve.”

11:58 – Advice for early-stage entrepreneurs pitching to build a platform

14:27 – How did MobiKwik evolve as a platform?

27:23 – What has transformed significantly in the last 1-2 years?

30:33 – Current revenue, profits, and scale

36:25 – Is the economy currently going into recession?

38:11 – What kept him going for 13+ years?

40:33 – Tailwinds which are supporting Fintech in India

44:52 – Creating a mental model to build in markets with already existing large players

 

Read the full transcript here:

 

Bipin 0:00

I think India’s biggest advantage is, you wouldn’t have one bank. You wouldn’t have one FinTech, you wouldn’t have won the UPI app. So it was an amazing experience for a few years.

 

Siddhartha 0:17

Dear listeners, this is your host Siddhartha Ahluwalia, founder of 100x Entrepreneur Podcast along with my wife Nansi. Before we begin, I would like to thank our sponsors Prime Venture Partners, Prime is the first institutional investor in category creating tech startups like My gate, Niyo, Dozee, Planet Spark.Prime is now investing out of its fourth Fund, which has more than 100 million dollars. Today I have with me Amit Somani, Managing Partner, Prime ventures. Amit would like to know, how do you evaluate founders and what are the different evaluation criteria like.

 

Amit 0:50

Siddhartha, so at prime we look for what we call category creating or category defining startups. So we’re really looking for in what way is a startup 10x Better 1,000% Better than the current state of the art, it could be product, it could be technology, it could be go to market, it could be a business model, whatever. So that is one of four criteria.As to the founders themselves. We’re really looking for founders that have very high learning agility or a very high learning quotient. You know why that is important because as you’re going through your seed to pre series A to series A and sort of journey to build your company to get product market fit to accelerate it, you have to make a lot of trade offs and a lot of decisions. So we’re really looking for founders that have very high learning agility.

 

Siddhartha 1:34

Thank you Amit, Dear listeners. Let’s dive straight into this week’s podcast.

Dear listeners, this is your host Sidhartha Ahluwalia. Welcome to the 100x Entrepreneur Podcast. Today I have with me Bipin Preet Singh, co founder and CEO Mobikwik

Bipin is an engineering graduate from Indian Institute of Technology Delhi in 2009, Bipin co founded Mobikwik, Mobikwik is one of the largest mobile wallet and buy now pay later platform in India, its tech platform has 120 million registered users, 25.3 million pre approved BNPL users and more than 3.4 million merchant partners. Bipin welcome to the 100x Entrepreneur Podcast.

 

Bipin 2:13

Thank you. Thank you for that. It’s great to be here.

 

Siddhartha 2:15

I would like to start with your journey before founding Mobikwik. Right after your graduation. So what are the things and events that led you to founding Mobikwik?

 

Bipin 2:24

Look, I think when you pass out of iit, there are only a few parts that are available. And I think that those are pretty well researched and written about in the media. So I took the path of taking up a job, which is actually not one of the most popular jobs, but I come from a family, where I was the eldest son, and two more siblings younger than me, and we come from a fairly modest background, before I started working. So the first thing that I had to do was to actually find a job and I took a thing at Intel. And actually, I started working when the world was going through a crisis in 2001. It just happened, September 11 attacks had happened, the economy at that time, the world economy, the US economy had gone through a fair bit of recession.

 

So I started at Intel, I loved chip design, I loved hardware engineering, being an electrical engineer, and started working in Bangalore. That was my first job, basically a design engineer. So when you design chips, you write code, which represent transistors, gates, electronics, etc. So that was the specialization with which I started my first job. I had a great time at Intel, it’s a great company to start your career with one of the biggest companies in the world today. And so yeah, I mean, I think we got to interact with a lot of people who were working from the US.

In fact, a lot of Indian expats had come down to Bangalore, I mean, now it’s the norm, but at that time, it was just where they would come and start something really deep in terms of R&D. So, this was the first chip being designed out of India, a fully fully integrated chip being designed out of India for Intel. So, it was an amazing experience for a few years, then I switched to Nvidia again in Bangalore, moved up as an architect and started working on their chips, which are used in gaming and graphics.

 

So different parts of the chips, design and Chip architecture started working on and then, due to some family reasons, I had to move back to Delhi and started working at Freescale semiconductors in Nida. Again, it was more as an architect as a chip architect. But by that time, after having worked for, let’s say, six, seven years, it’s like when you’re about to hit 30 They’re trying to figure out what to do next in your life like you’ve started off in a certain path, but you want to figure out because some of your friends are doing MBA, others are, working in US some are becoming consultants, some are becoming bankers. Very few of them, were becoming entrepreneurs or starting a company, at least what I recall at that time, but I had given GMAT and I had full plans to actually go to us to pursue an MBA and got this from a few schools also, but then, I think due to certain reasons, I didn’t go.

 

And, it was clear that the line of work I was working in, which is chip chip design, I was done with, I was not going to pursue that anymore. It was not that and if it is not higher studies, to go to the US, and incidentally, every time something major happens in my life, there is some world crisis happening. So, when I passed out, it was 2001,2002, September 11, when I was getting frustrated with my job, it was the 2008 global financial crisis, and that was happening in the US . So around that time, I think, going for an MBA also wasn’t making a lot of sense taking loans, and then, basically, paying back your loan for several years.

 

So, I think I just met Upasna. Who had just come back from us, after having worked at PayPal, and then we hit it off. And, we basically decided that, I quit my job and started moving the idea of Mobikwik was born while I was still working. But I plunged into it with no capital, no savings, just a pure idea of some website, which allows you to recharge your mobile, so as simple as that, but with a wallet. So that was one of the first reasons that we thought that you want to pay for your 50 rupees recharge every time with your card or bank account, or maybe an online wallet makes a lot of sense. And then you can accumulate a lot of your payments. And there weren’t, there were no smartphones at that point of time. It was only desktop, there were some versions of smartphones, like a Blackberry or Windows Windows Phone. But there was no Android and iPhone, it just launched in the US. It wasn’t available in India or wasn’t popular in India yet.

 

So yeah, interesting, very different times, very different sort of, I would say startup ecosystem, very different, or early VC ecosystem, funding ecosystem, people who started at that time, would know that. But yeah, I mean, we got started and without thinking, right? I mean, that’s how, as an entrepreneur, you do, you just take a decision, and then you figure out the rest, you jump out of a plane, and try to figure out if you can build a parachute on your way down. So that’s my story. That’s the story of starting Mobikwik.There were very humble beginnings and a lot of hustle. And we were bootstrapped for the first few years. Firstly, three-four years. These days, you start a company and you please raise a seed round and Angel rounds. So we actually didn’t do any of that. We started working from our apartment, literally, where we used to live, and put a desk in the drawing room, and the first employee would come and sit on that desk, and I would go in the kitchen and make Maggie and tea.

 

So it was like that kind of beginning. And then from there on, we obviously progressed, but it took a few years for us to get to a scale where we decided that we are ready for sort of, what you’re calling a zero to one. So we realized maybe sometime in 2012-13, that some things are working, that business is scaling, and that we have a product market fit that people are using our app, we already had a million users. We were early on Android. We were One of the first apps to launch on Android in India Mobikwik app. And so we got good traction. And then from there on we started raising money and then yeah, here we are.

 

Siddhartha 8:59

Bipin if you could describe right so the initial vision was not to transform the digital payments landscape as you’re doing it right now. It was just to solve a specific problem that you started with. How could people who went online recharge

 

Bipin 9:12

Yeah, so I think I always knew that the problem is obviously the problem that I faced personally. I’m the eldest in my family and I had two younger siblings especially a younger brother so not used to doing any work at home and would tell him to do this and go get that etc. But when I came back in 2006-07 back to Delhi then my younger siblings weren’t at home; they were either studying or working.

 

So my mom used to say okay, go get this 50 rupees or 100 rupees 200 rupees top up for me, like what is this? you go down and give cash and the shop is open and then it takes like 15 minutes of your time energy wasted. Why can’t this be done online? So that’s how the problem statement which I was facing personally, transformed into some form of an idea, then I studied that, India has a lot of people, who are on prepaid. Still do. So, in the market, the mobile phone market was growing very fast. So I said, Why not make a website which will do this?

 

But then I had a little bit more foresight to say that, obviously, this is only one use case, this has to develop into something bigger. And so at the back of the mind, payments were definitely there in terms of larger payments-play, or wallet play. But yes, I think you can’t start a company unless, you’re solving something very specific, for the first time or the in the best possible way, which users will then start using

 

Siddhartha 10:50

You’re saying that you can’t build a platform on a demo, the platform has to evolve from some specific problems from

 

Bipin 10:57

you can’t, you have to solve something very specific, something very deep, even if your broader idea is a larger sort of set of markets, but you can’t attack that? Like, for example, if you were to try to build a search engine today, to take on Google, it’s very tough. Because it’s impossible, it’s not impossible, but if you can, you wouldn’t start making it as a generic search engine like Google, you will have to find something where you can outdo Google, very specific kinds of first search functionality, maybe only for a specific set of customers, and a segment of customers.

And then once you get traction, then you expand and then you can say, okay, I can do this, and this and that. So I think this is a similar story for, in my view of almost all companies, even if you have a larger vision in the beginning, you really start very specific and very narrow.

 

Siddhartha 11:53

And what about the entrepreneurs of today who have the platform word and just seed fundraising decks? Any advice for them? Because people want to build platforms, or are pitching to build platforms from day one, because it’s much more lucrative in the eyes of others?

 

Bipin 12:12

Look, I mean, I don’t, I don’t think that it’s, it’s bad to be ambitious, I think it’s good to be ambitious, and think big. But honestly, starting a company, and making it successful is full of risk, right? 98-99% of the company’s startups are not going to survive. Even after a seed round, there is a high sort of fatality rate, in terms of who is going to get to Series A, and Series B, C, etc. And I believe personally that it’s better to have strong traction at each stage, and have the vision, but the execution goes broader, only as much as it’s needed. If you go too broad. In the beginning, I think you can’t do justice. Because to build a large platform, you need a lot of resources, you need a lot of engineers. But if you were to build a product, or a which is like a platform, without figuring out how to get distribution, for example, on how to get users, then it almost always doesn’t work.

 

So it’s best to actually link distribution with your product early on, get the traction, build it, expand it. And I think that’s what works, not to say that, something, which is very deep tech doesn’t necessarily need, let’s say, you may need 12-18 months, 24 months of build out, but I think, then the end product, or the platform has to be, let’s say in 24 months, you build something, which out-does Google or you want to build a social network, which is really, those are bigger bets and they’re, you can be bold and say that, okay, I will build something or you want to build a replacement for Microsoft Word, or Microsoft Excel. So those are much harder problems, but I think most of the ideas, startup ideas are not that, most of the startup ideas, at least in India are more service oriented, linked to distribution, linked to customers or transactions, etc. So it is best to get the proof of traction early on.

 

Siddhartha 14:27

And if you could share, from 2009 How did Mobikwik evolve in Asia beyond the recharge service?

 

Bipin 14:36

So, like I said, we started with a recharge service. But the service was delivered via wallet. It was a desktop wallet, you could load up a wallet and you could use it, then we added other kinds of services, which are more similar to bill payments services. So we initially added television recharged so it’s about the same time when you know people get started these days. Almost nobody uses cable but that time everybody was using cable and not satellite television. So satellite television like Tata Sky, etc started coming up.

 

So people needed this service where you could put that, and that’s also prepaid. And then from there on, then other kinds of bills, electricity bills, landline bills, different kinds of bills.

I think it was largely a bill aggregation game until about 2012-13 When we launched the app. And also there was some amount of p2p also, so you could transfer money to each other. Even though it was just a wallet because there was no UPI. At that point of time, you couldn’t easily transfer money from one bank to another, I think in 2013 we got a license from the RBI to run a wallet properly. And before that, also, we were running a wallet, but it was more like a closed wallet.

 

That’s when the second phase started. The second phase was about adding now merchants right into the mix, which is not just about what you’re paying on the Mobikwik app, but also what you can pay with Mobikwik on let’s say, a book, my show or make my trip, or an eBay, these used to be very popular at that time. And Domino’s, to order pizza, etc food panda. So getting on the merchants, especially the online merchants, was the second phase. And that’s when we raised funding for Series A, where it was becoming clear that consumers needed better payment experience online, compared to what was available, which was largely around cards, internet banking, cards and internet banking worked. But with a wallet, you could have a much smoother experience, you could have one click kind of an experience, especially paying online.

 

So that was the second phase of our growth. And then that third phase came when we started going into the physical merchants. Also, we got a big bazaar at that time, we were one of the first wallets to go live in all the big bazaar stores where you could actually go there. And at that time, you know, before QR codes, there were different kinds of formats.

And that evolved in terms of how you pay makeup payment, some of them are actually making a comeback right now, in terms of either getting a ping or a notification on your phone to approve a transaction, etc. So being in a physical store started picking up and then QR codes happened in a big way. And then UPI also I think happened around this post Demonetization around that time thing. So at that time frame, when UPI also happened, and there’s obviously competition and the payments sector was also growing significantly.

 

What we figured is that, while payments will be a great mechanism to get customers on board, a great mechanism to create trust- customer trust and engagement. But as a business, we needed to do more, in order to generate margins and profits.And so we seriously started thinking about what it is that we can build on top of it. And we had two paths. One path was, like trying to become a super app, which is that we already had 20 million plus users at that time, I’m talking about 2017-18. So we could have gone on e-commerce and travel and ticketing and other kinds of services on the app and monetize, this customer base using that distribution and the users who are on the app, or the other path was to actually, build something which is deeper. And that’s the path that we chose with some deliberation. We said that we’re going to go deeper into FinTech and the first FinTech product that we built. And we were one of the first ones to do this with digital credit. Because we saw that most of our most of the people in India do not have a credit card, and they don’t have access to credit, formal credit through banks even today.

 

So even today, about 50 million people have credit cards. At that time, it was less than 30 million. But obviously internet and digital payments and transactions were accelerating, and UPI started coming into the mix and UPI was more about making payments from your bank account. So we saw an opportunity that credit is going to be big and credit should not be looked at just as taking a loan rather, just like you use a credit card to just make payments and clear it. Maybe what will happen is that people will start using money and meeting bill payments and transactions without having money in the wallet or without having money in the bank account and then settle it later after a few days or weeks based on their convenience just like what a credit card offers. So that was the beginning of our Buy now pay later journey.

So we decided that we already have a wallet and the wallet needs to actually have money in order to transact. So we would remove that requirement based on our assessment.

So we built up a strong data science team.

 

First to understand customer behavior, how could we build risk models or underwriting models? On top of the data that we have, which includes the type of device, type of transactions the customers are doing, how much they are transacting, what is their likely income, do they have a card or not which state of society or income or affluence do they belong to?

So on the basis of that we started giving sort of small ticket credit to customers, which is linked to the wallet. This product is called Mobikwik Zip. So this is where we actually pre approved more than 20 million-25 million users from our own customer base. And that said, these customers do not have a credit card, they do not have any other forms of credit. So we’ll give them digital credit linked to the wallet and start doing transactions just the way they are, except that now they don’t have to put it in the wallet with you, they can choose the transaction.

So I think that’s been what we’ve been focusing on over the last three, four years. And that business has grown significantly from zero to almost now 30 to 35% of our overall business comes from credit. And we also have plays on the wealth side and insurance where we are building technology. But we are still early there. And we have a mutual funds platform, we have, ability to sell insurance on the Mobikwik app. But I would say the biggest FinTech product that we are focusing on is buy now and pay later. 2020 was very interesting. I mean, so this was like, I would say phase three of our journey. And it was going along nicely. Until COVID happened. And then when COVID happened, everybody got disrupted, markets got disrupted. Interestingly, we had four term sheets, just before COVID had started in March 2020.

 

Siddhartha 22:05

it was, how much bigger? And what round? Would that be?

 

Bipin 22:09

Yeah, so it was, I think, a total of about $50-60 million. And one of them actually, even not just a term sheet, it was actually a signed shareholder agreement, essentially. So the agreement was signed, and just the wiring was left. But then, this was on I remember the date, this was on March 9, we signed. And for March 10, onward, the markets in the US started going down significantly. And so the investor pulled out because there was a lot of uncertainty at that time. And so, yeah, I mean, I think that is the year 2020.

 

So, you remember the lock downs and everything. So the consumption went down. And obviously, credit became much more challenging. Forget about giving more credit, it was about recovering what you’re already given out in the market. And so with funding gone, and not coming, and then credit, collections, costs and going into crazy numbers, those six to nine months, starting from March, April to sort of, I would say, end of the year, were very, very tough, extremely tough, tough to the extent that, we had to literally think of everything that we have to do, to make sure that the company survives, and then grows. From there, even though we had good scale, at that time, you’ve already crossed $50 million of revenue, but we needed our revenues, our revenues were hit big time and losses were climbing up.

 

One of the big calls we took that time was not to lay off anybody. So we actually ensured that, it’s okay, we’ll cut down everywhere else, but because jobs people are getting laid off also, and it’s very difficult to get jobs in such a tough environment. So, we decided not to do that, and write it out.Thankfully, we survived. And then and then from there on, we took the call that, okay, if you can survive this, and we can get close to profitability, then maybe, we can do anything, and maybe we can also go public. And so, we decided actually, the next phase which was preparing Mobikwik to go public, and this was in early 2021, as we were coming out of COVID.

So, Upasna led most of that effort, but it was the first time obviously for us and so, we are trying to figure out what all needs to be done, a lot of changes on the company side, around governance especially.

 

So, typically a company is run by the promoters or the founders in sync with the investors. As when you have VC funding, now we have to build an independent board of independent directors. So we built that board, we have to, we have to change the way we report our financials based on what public markets need. And that is much more thorough and much more,

I would say detailed and needs to pass a much more sterner test, we always always had a top four, kind of auditor, but it was just a change in the standards of what is needed when you’re going public.

 

So we did that and we raised a bunch of money, we raised money from Abu Dhabi Investment Authority last year, as we’re going public. So yeah, I mean, I think we did well. And we didn’t actually go public last year, in that towards the end of sort of October, November the market has already peaked. So I guess we got, we got a bit late, about maybe at least a month late, we should have gone earlier. But by that time, the market had started turning so we took a call that, we are ready, we have done a lot of hard work, and to go public. So we will do it at the right time. And that’s what we’re doing right now as we continue to build the company. And we had the last two quarters, which are very, very good in terms of business performance.

 

So I would say this is a new interesting phase of the company. the company’s transformed completely from what it was even one year ago, forget about two, three years ago. Because as a private company, you’re running the company, and then trying to figure out what is happening.

And you have less experience, also you try to figure out where the money will come from, or you need to become profitable, as you become profitable, then can you compete with competition, who’s burning a lot of capital, etc.

 

So a lot of those, ifs and buts and balances. And I think many times as entrepreneurs, we slip up, and we try to do a lot of things, where the land of the company, neither here nor there.

So thankfully, we took a call that we are going to continue to grow, but we will do it in a profitable manner. And we need to have a very sharp focus on payments, and by now pay later, which continue to be our core strengths. So that is what we continue to build. And as and when the markets recover, hopefully the next phase or the company will start.

 

Siddhartha 27:22

And what has really transformed, if you can point out to three to four things in that company in the last one year that you can point out to each other.

 

Bipin 27:30

So I think one thing which has changed significantly is obviously the governance. I think the corporate governance in the company is for anything. we’re also a regulated entity, we have licenses from the Reserve Bank of India, plus, as a process, we became a public limited company with an independent board. And there are requirements. So when you’re a private company, you still have a board and board of investors, but mostly they are your friends, that’s why they invested in your company. So follow the processes, etc. But still it is more for compliance. I think once you get to the stage where we are, you have to follow things to the tee. And you have to be very proactive. In terms of corporate governance, you have to actually cannot afford to have misses there. You know close your books or to fight or do filings or taxes or all those things or anything which requires either a board approval or a board disclosure, those kinds of things. So I think that part has become fairly strong, we built a very strong secretarial, and finance team last year. We hired a very experienced CFO, because he knew that that is required in order to go public. So I think with our finance, legal, and secretarial work and compliances as a company, we have become far stronger than we used to be. Before and not for lack of trying earlier, it was more like you’re focusing on growth and tech and building new things and getting customers and making a noise. But with this transformation, you basically are trying to cover for any gaps in the governance side. And I think that is one second we become a little more process driven as a company. We don’t change things or change strategies very quickly. Although you could say that as a startup, it’s an advantage to change things every day.

 

But then, once you have a strategy clear, then changing things every day, in terms of how you execute also becomes actually a bottleneck because, so I can say that, I, for example, only now set the strategy and I don’t run things, day to day, the day to day things are done with a lot of independence and freedom by the team. And I think that’s a big transformation that has happened again in the last I would say quarter to 18 months and that’s thanks to the fact that we hired some competent management team as a CXO, as a CFO as a, as a chief product and technology officer, I used to be the de-facto CTO Upasna used to be the de facto CFO. But now we don’t do that anymore. So we have people who would do that and manage their large orgs. So yeah, I think we’ve scaled up as a company. And as founders, we are focused more on vision and compliance, governance, and the next steps in terms of where we want to go,

 

Siddhartha 30:32

Right now, you would have filed because you became a public limited company, the DRHP and disclose all your revenue numbers, if you can share with the audience. The current revenue numbers, the current profits, if possible, to give us an idea on the scale of Mobikwik.

 

Bipin 30:52

So basically, CFI FY 19, we had a revenue of less than 150 crores. And in FY 20, we had significant growth, reaching almost 350 -360 crores. And we had figured out how to grow with positive margins. But I think the first step towards profit was that you don’t get to profit directly until you fix your unit economics. So from a unit economics point of view, from a margin point of view, we had gotten into the 20%, kind of margin dead in I think, September of 2019. So FY 20, was a great year that way, but then 21 was a balancing act, because the first six to nine months, the revenue actually went down significantly because of COVID. So that’s when you know, we had a slightly down year in terms of, you know, getting closer to 300 crores in terms of revenue. So from 360, we went to 300 crores towards the end of that year, like, starting from last year, we are already, started growing again, in a significant way. And so this year, while the numbers are not public yet, I can’t give you the full number.

 

So we have shown significant growth, for this FY 22, the match which just added, upwards of 50-60%, kind of growth, for the full year, as well as at a quarter level, we have gotten pretty close to profitability. Actually, one of the quarters was profitable. So I think we actually learned a little bit from what’s happening in the public markets, also, and how, what’s the feedback coming? For a lot of tech companies in US markets, as well as India markets, growth is all fine. But how long will you continue growing and also burning a lot of cash? So we have gotten to a stage where we are able to grow without losing more cash. So I think the business therefore, is in a great place, in terms of, it’s poised for significant growth this year. And I think that that’s when, we will find the right time, also, to go public.

 

Siddhartha 33:07

And even if the market continues to slide this year, or maybe the early next year, you’re still very much in a resilient shape that you don’t need to go.

 

Bipin 33:18

No, not really. So we are not. So we’ve built, I think we’ve gotten the company to a scale and to a model, where we know what works, where the margins are, that we can continue to grow profitably. So as far as the company is concerned, I think, we hope it will be a 1000 Crore kind of revenue run rate company pretty soon, in a matter of maybe a year, two years maximum. And that’s a, from Indian standards, if you see even companies that are listed. In India, that’s a sizable company. It’s not a large cap, but it’s still a sizable company. So yeah, we have our parts cut out to be clarified for that scale, without losing money. So therefore, I think, we’re not that depended on the market, in fact, that’s the call we took last year that, we don’t need to go out and list and then see our stock collapse immediately, because that’s what happened to some of the other other stocks and in the way the market was behaving.

 

Siddhartha 34:27

Why do you think, towards the tech stocks, both in the US and India, there is a certain, negative sentiment right now,

 

Bipin 34:37

I don’t think that there is a negative sentiment per se, I think it is that last year. See markets are, in my view, never balanced. there either, too aggressive or too conservative last year, markets, public markets, were simply too aggressive. And because there was so much free money available, looking to get deployed, the Fed was publishing the dollar like anything. And so I think they have led to valuations, which are unsustainable in the long term. So it has to be corrected, right? The thing is that because once the Fed gives a signal that inflation is high and the rates are going to change.

 

So it’s not just about, by the way, tech companies are more being noticed, because of the fact that they became darlings, many of them, many of the companies which listed in the US became media celebrities, etc. But a lot of those stocks have been collected, corrected. 70- 80%. But even after correcting 70-80%, they’re actually trading at not too far from the historical multiples that these industries, demonstrated over the last many years. So you can argue that the valuations that were being given were very, fairly significantly high. But I think now it is also going in that it has gone in a territory where it is, in my view, personal view, it’s overcorrected. But that’s what the market is: the investors are either too bullish or too bearish. It’s never the right time. So it’s just a curve, everything that the curve has to change, eventually, it will change. It’s a matter of time.

 

Siddhartha 36:24

And you have personally experienced two recessions. And you mentioned that whenever there was a significant moment in your life, the recession had just had to do you think we are the economy’s going into recession, as per the global economy?

 

Bipin 36:37

I don’t think so. I don’t think so. I think I think the fundamentals of at least, the overall economy. I’m not such a big expert. But when I see the tech driven economy in India, or the startups, and I think every single company, if you look at starting from Infosys to TCS, which are IT driven services companies, and the long tail in that space to startups. I think every single company is doing significantly better than what they were doing last year, I think the economy is doing extremely well, spending has gone up. In fact, that’s one of the reasons why inflation is also applied, because consumer spending has gone up so much. Of course, there’s oil price, etc, which is a dampener for India.

 

But both the US economy and Indian economy, I think, in general, are in great shape. And it’s only the markets, which have actually, initially become too bullish. And now, because of certain changes in geopolitics. But otherwise, I think I predict that this year is going to be one of the highest growth years, especially for India. And so, while you may not hear about a unicorn being minted every week, but you know, those who are there companies, the core of the, the metrics, like revenues and margins, etc, will significantly improve over the next six to 12months

 

Siddhartha 38:13

And Bipin, if you can share with other entrepreneurs, right, what kept you going for 13, long years, and you’re still really excited about what leaves next? What has been done?

 

Bipin 38:23

Well, I just like I think, there’s been a lot of times, we’ll say, crisis moments or times when you think what is going on, I mean, this is, is this enough? Hey, good times, as well as bad times, I think what’s kept us going is one is the space that we are in, has evolved really continuously. And it has evolved, of course, to a point that two years ago, what it was in what it is in FinTech is already, when it talks about the broader FinTech ecosystem, it’s become far bigger. So as a technology enthusiast as a product enthusiast even if I had to ever do something else, I don’t know anything else except FinTech and within Mobikwik there is so much innovation possible. It started with payments, wallet, UPI, the experiences, credit and just take credit, digital credit and that itself is a fascinating opportunity, small ticket high ticket, then there is insurance. Well, for which I don’t have enough engineers, and I don’t have enough mental bandwidth to actually say what to do in that space.

 

So I think the space in the market has kept us going and the fact that there’s a certain belief that we are destined to become big because we have survived many many different kinds of crisis situations. In 2019 sort of early 2019 We almost ran out of money. In 2020 I told you like four term sheets fell, one agreement fell COVID And even then we survived and now this year, we have grown to five public. So I have a strong confidence that I can, we can build a company, which we’ll keep going. From that point of view, it’s a little different, I mean, there are different models out there, you can build a company you can, you can exit etc, but, what we are building in Mobikwik today is at least hopefully, for the long term.

 

Siddhartha 40:33

if you can share, like your views on the FinTech in India, India has produced the second highest number of fintechs globally in the last three years, what have been the tailwind that that are supporting it right

 

Bipin 40:46

Now, I think India’s biggest advantages are obviously, one is the demographics itself, right. Second is the economy, And third is technology. We have a young population, we have an economy, which is growing very fast, but most of the economy is non digital, and most of the economy is not, people are not part of the formal financial system. I mean, even though people have gotten bank accounts, but for normal people cash is still at highest today, in the ecosystem, even though people are doing QR and all those transactions, even with UPI, etc, there is maybe 100 million and 50 million people who are into the, this ecosystem, but not beyond that, with a population of 1.4 billion.

 

So demographics, the economy and third is technology, I think the technology part where through a lot of regulatory/government initiatives, through Aadhar, through India stack, through the digitization of the entire banking Process Payment, not just the payment process, but the entire banking process, credit insurance, etc, digitization has become such a strong mantra, from top to bottom. So these three things are combining together to create huge opportunities at a country of India scale where you can, let’s say pick in any insurance, you can pick something like corporate insurance, and say insurance for corporations or insurance for startups. And that process is entirely broken, and you can build a pretty large company, just in that space, given the growth rate that is happening or you can pick SMEs, you can pick small businesses, and you can figure out a business model of how to digitize them or to how to provide financial services to them.

 

So, the combination of those India’s size of demography, the the economy of where it is, and the former financial system and the technology push, which includes not just the Aadhar etc,, but also Jio and smartphones and everything which is obviously have happened in a big way means the India is actually if you think about it, it’s the only country in the world where, more people have smartphones today than they are actively doing payments or digital transactions, or or even actively using bank accounts or, or have credit cards. This is not there in any other part of the world. China is an example. But China is then isn’t is not English speaking, integrated into the world ecosystem because FinTech has done extremely well as well. So that’s why I’m very, very bullish that FinTech in India, the fact that we are English speaking, connected to the world also. And we have a large domestic economy, which is growing so fast money in physical form, or money dealings in physical form, or dealing with other people with respect to money, whether taking a loan or buying an insurance or covering your risk, eventually, all of it will become 100% digital. So you can imagine that at India scale, what does it mean? In terms of FinTech opportunity.

 

Siddhartha 44:17

We’ve just touched the tip of the iceberg in the last 10 years.

 

Bipin 44:21

This is actually just the beginning, which is what you asked me. What keeps you going right? Actually, right now is the right time to start a company in FinTech. Not when I started because when I started the market was so small: there were no smartphones, etc. So in some sense, we were ahead of the curve or ahead of the time right now is the right time you pick a space and you build into it. And you can go make a bit, a big, very big business.

 

Siddhartha 44:52

that is also you have broken the norm that that you have to is a market leader in b2c internet space to grow right When you started, there was already freecharge in 2009, then, in 2012, there were Paytm and several other today there’s Paytm, phonePay, Google Pay, and so many others, but But you have been able to build a niche for for yourself. So how do you build that mental model of how you convey that to entrepreneurs? Because it’s very single minded today, in this ecosystem, you have to be the market leader so here’s the maximum amount of money to just kill the competition.

 

Bipin 45:30

Yeah, I think I don’t agree with it. I personally don’t agree with it. And you have to, for this to happen, you have to believe that history, lessons from the economy, and you have to look at the what happened, for example, in banking space, or in telecom space, or a few other, spaces, I just like, you wouldn’t have one bank, you wouldn’t have one, FinTech, you wouldn’t have one UPI app, you wouldn’t have one up for customers. What you see today, for example, is, let’s say, obviously, some people take early lead, invest more, have more capital, they require more customers, give more cash backs, etc. But obviously, that is not sustainable. Everybody has to figure out a business model. At the next level, whether you do credit or become a super app or something like that, and at the end of the day, right, you have to figure out what kind of business you want to build.

Kitt leadership in b2c, or b2b whether it is b2c, or b2b, I don’t think it makes a difference, if you do not have the advantage of basically eliminating completely the competition, and taking all the profits away, which means become a monopoly like IRCTC if you don’t have that, then that market leadership is not very useful, because you will actually get more efficient people doing the same thing that you are doing in a much better way at a lower cost. And if they do that, if they provide better user experience, etc, then the users will migrate there. But in the process, obviously, there is capital involved, there is cash burn, etc involved. So, in my view, if you look at Zerodha, for example, Zerodha has become market leader, not by raising VC money or spending a lot of cash.

 

So, in my view, the market opportunity in India is very big, people will still respect and like market leaders and give them a lot of capital, but then the expectation from them, therefore, is to grow again 10x from them. And we’ve seen examples where it hasn’t worked out very well. For many of the market leaders. It’s far better as an entrepreneur, in my view, to build a company where you can control the future and outcome. And that of course, you can, if you have a lot of capital, you can burn that. But eventually you will have to build a sustainable business. So if you don’t build a sustainable business, being market leader eventually, in my view, doesn’t count for anything. As you can see, eventually, these companies eventually have to exit.

 

So somebody has to either buy or company or relist with the kind of valuations that we raise money at these days in India like unicorns, throw stones and there is a unicorn. The exit paths are actually m&a paths are pretty non-existent. Nobody’s buying companies that are worth $2 billion or $3 billion in India, it’s not as well developed in India yet, you don’t have the Tatas and the birlas buying billion dollar companies every week or every year. That yes, there is some m&a, but it is nowhere close to the size of the ecosystem in the opportunity. And the second thing is we’ve seen how the market treats companies, which continue to do cash burn, especially when they go public.

 

So I think, like building a company, which is which you can build up with positive margins with great user experience great engagement, and continue to grow 30-40-50% year on year, in my view, you can build a very large company, and a large outcome for all the stakeholders trying to be a market leader, which involves, in my view, a lot of risk. And in that risk we’ve seen even in my own industry, we talked about their companies which actually flamed out and then burned and you know, it went to zero. So, if you’re prepared to take risks where your companies can go down to zero, then I think that’s a difference in my view, to different kinds of strategy.

 

Siddhartha 49:47

And we have seen last year right, the public markets were a real test of our company. The company was doing 300 crores of revenue fast plus services company India made them wait three years to Pour it on the distinct day. And they’re still above that price in such times and doing just 300 crores in revenues, whereas companies larger that size, but guzzling cash, public investors don’t respect that.

 

Bipin 50:15

I will, I will give you sort of specific examples in India, like there are companies in the OTA space travel space, for example, right. The makeMytrip has been with me for a long time. And after they merged with goibibo, and others became obviously the de facto market leader, with 60-70% market share. But it continues to sort of lose money. And the stock market hasn’t liked it, the valuations haven’t gone up. And on the other side, you had a player like his easemytrip which almost nobody had heard of, and it was profitable. And it went public, albeit in the bull run. But it’s a, it’s doing well, if you see every single company which goes for listing and where you get oversubscription etc.

 

There is something fundamental that is working in the company. If your business is not going to even survive, if you do not have enough cash, then the public markets are not going to like it. And I think that’s the call that has to be taken. They care less about market leaders, if that was the case, then you look at IT services, for example, you have the Infosys TCS, but you have a lot of mid level IT firms, which actually trade at a higher multiple than then Infosys and TCS, etc. So, I think it’s not just all market leadership, in my view, it’s about creating a company with growth and profits. And if you can do both, ultimately, growth is also important. That’s how the investors make returns.

 

So, in India we are chasing, especially a lot of startups are chasing a lot of growth, but I think the ecosystem has become fairly big, that you can actually be a contrarian ,in my view. And you can say that I’m going to continue to grow only as much as my margins allow. And I’m gonna fix my unit economics before I do growth at all costs. In that event, the chances of failure and the chances of not building a large company are very, very low, you’re almost guaranteed that you will end up building a large company, investors themselves will come to you and say, boss, You are building a great company, how are you doing this? Because others are not able to others are not able to do it.

 

Siddhartha 52:51

Thank you so much. And it’s been a wonderful, wonderful conversation with you on your journey on the journey of MobiKwiK and, and how you look at a very different view of the ecosystem, which is, which is working right now. Thank you so much again.

 

Bipin 53:06

Thank you.

 

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