MoneyOnMobile, a Dallas based fintech Investment Company plans to invest about US $100 million in the Mumbai – based pre – paid mobile wallet and remittance service startup, My Mobile Payments Limited (MMPL). MoneyOnMobile was formerly known as Caplain and is currently listed in the US Stock Exchange. It entered the Indian fintech market in 2012. Prior to this investment of US $100 million, MoneyOnMobile had invested upto US $30 million in MMPL. Harold Montgomery, Chairman and CEO of MoneyOnMobile said that the Company would aggressively invest on Indian startups for the next two to three years and expand its presence in India. Read more on Investments
MoneyOnMobile is a pre – paid mobile wallet where customers can pay their bills online after recharging their MoneyOnMobile wallet with cash at a retail store. While most of the mobile wallet startups in India witnessed a boom in their business after the demonetization move during October 2016, MoneyOnMobile witnessed a significant decline in its business due to shortage of cash with people. They were not able to recharge their MoneyOnMobile app with cash.
“We are tapping the unbanked and hence, we have to deal with cash, and that’s a great opportunity for us as cash transactions are still at 80 per cent. Besides, we are helping the users, in a way, to get into the banking system”, Harold Montgomery said.
MoneyOnMobile recently announced that its revenue plummeted 39% during the third quarter (Q3) that ended on March, this year (2017) to US $0.97 million when compared to its revenue of US $1.61 million during the third quarter (Q3) of 2016. The Company’s gross profit stood at US $0.58 million during the third quarter (Q3) this year when compared to its gross profit of US $0.89 million during the third quarter (Q3) last year (2016). The company earns between 1 to 3 percent of mobile transactions’ values as commission. MoneyOnMobile is present in 600 cities, towns and villages across India with a high concentration in North Eastern states.
The mobile wallet sector in India has seen a tremendous boom in business post the demonetization move in October, 2016. The revenues of most of the mobile wallet startups in India grew by about ten times during this period due to the cash crunch. Most of the prominent mobile wallet startups in India got funded by International VC firms like Sequoia during this period. For example, in November, 2016, the mobile wallet startup Paytm raised US $890 million in Series B round of funding from the VC firm, Sequoia. In October 2016, Mobikwik (another mobile wallet startup) had raised US $86.8 million in Series A round of Funding from Sequoia as well. In December 2016, BankBazaar.com and PolicyBazaar.com had raised US $80 million and US $69.6 million from Sequoia respectively, just to name a few mobile wallet startups. Online transactions are advantageous as they prevent theft and duplication of currency notes, thereby reducing black money with people. I personally believe that MoneyOnMobile would have a better business in India if it allowed people to recharge their mobile wallets online rather than at a retail store by cash. Recharging mobile wallets by cash defeats the very purpose of having mobile wallets and doing cashless transactions. Hopefully, MoneyOnMobile will rectify its business strategy in the future and fund more useful startups like the Mumbai – based My Mobile Payments Limited (MMPL). Read more on Startup News