IPO-bound MobiKwik turns unicorn as employees exercise ESOP option

MobiKwik, which earlier this week received the regulatory nod to float its initial public offering (IPO) worth Rs 1,900 crore, has turned into India's 32nd unicorn this year after a secondary transaction that valued the digital payments firm at $1 billion, a person familiar with the development told VCCircle.

The transaction was led by former Blackstone India head Mathew Cyriac who doubled down on MobiKwik at almost twice the price he had invested in the startup earlier this year, the person said citing anonymity.

This was facilitated after MobiKwik's employees decided to exercise their employee stock ownership plan (ESOP) in the secondary sale, the person added without disclosing the specific financial details.

In September, MobiKwik had said that it had reserved 4.5 million equity shares for creating a pool of ESOPs. The shares when fully diluted sum up to 7% shareholding in the company, it had said. It had also said that its IPO will create seven crorepati employees with a net worth of at least Rs 10 crore ($1.3 million) each.

A MobiKwik spokesperson declined comment while Cyriac did not respond to a call.

Just weeks before MobiKwik filed its draft papers for its IPO, the company had raised Rs 149 crore ($20.4 million) in its Series G round of funding from United Arab Emirates-based Abu Dhabi Investment Authority (ADIA) at a post-money valuation of about $734 million (Rs 5,360 crore).

In July, Mobikwik, backed by Sequoia Capital and Bajaj Finance, filed for an IPO of up to Rs 1,900 crore ($255 million) with the markets regulator the Securities and Exchange Board of India (SEBI).

The IPO includes a portion of fresh issuance of shares worth Rs 1,500 crore and a secondary sale of shares worth Rs 400 crore from existing investors.

Sequoia India, the second largest shareholder, will get close to Rs 95 crore from the sale of shares.

Notably, MobiKwik's IPO filing had come days ahead of its larger rival Paytm whose IPO size stands at Rs 16,600 crore ($2.23 billion).

MobiKwik, which was founded in 2009, defines itself as a fintech company providing payment solutions through mobile wallets and Buy Now Pay Later (BNPL) channel.

In an interaction with VCCircle in August, Upasana Taku said that it does not intend to become a super app like its competitor Paytm.

Rather, the company is following a focused execution strategy where it will double down on payments and its digital credit business, according to its draft IPO paper.

MobiKwik is the latest startup to turn unicorn this year taking the total unicorn tally to 32 compared to just 11 in the whole of last year.

Just last week, India witnessed the creation of three more unicorns, Rebel Foods, Licious and CoinSwitch Kuber, as they raised fresh funding at a valuation of over $1 billion.

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