Digital payments firm One MobiKwik Systems Pvt. Ltd has acquired online wealth management platform Clearfunds, entering a segment where bigger rival Paytm has already set foot.
This is the first acquisition by MobiKwik and will help it strengthen its foothold in the digital financial services sector, a company statement said on Thursday.
MobiKwik didn't disclose financial details of the deal but said it plans to invest $15 million (Rs 110 crore) over the next year to expand its wealth management business.
The development comes just a month after Paytm, the market leader in digital payments, launched its Paytm Money wealth management unit. Paytm had made its maiden capital infusion, of Rs 9 crore, into the unit in April. At the time, Paytm had said that it planned to invest $10 million in the new business.
MobiKwik said its 107 million customers will soon be able to start investing in mutual funds.
“This acquisition will help us get a headstart in the wealth management domain,” said Upasana Taku, co-founder and director, MobiKwik. “We will continue to look at strategic investments or acquisitions that can add value to our business.”
Following the acquisition, Clearfunds founder and CEO Kunal Bajaj will lead MobiKwik’s wealth management business. Bajaj has about 18 years of experience in the financial services industry and has worked at the financial institutions such as Goldman Sachs, Credit Suisse and JP Morgan. In his last role prior to starting Clearfunds, he was managing director and head of equity sales at Jefferies India.
Clearfunds, operated by Harvest Fintech Pvt. Ltd, was founded in 2016. It is a direct mutual fund investment platform that uses data analytics and automated processes to help users invest. It uses computer algorithms to build, monitor and rebalance diversified mutual fund investment portfolios suited to an investor’s stated goals, time horizon and risk tolerance.
MobiKwik was founded in 2009 by the husband-wife duo Bipin Preet Singh and Taku. It has raised about $115 million in total funds so far from investors including Sequoia Capital, Net1, Tree Line Asia, Cisco Investments, American Express and MediaTek.
Apart from Paytm, MobiKwik competes with Axis Bank-owned FreeCharge and several other digital payments companies. It was valued around $279 million in January when Bajaj Finance increased its stake in the company.