MobiKwik enters wealth management with acquisition of Clearfunds

New Delhi: Digital payments company MobiKwik has acquired online mutual fund platform Clearfunds in an all-stock deal. It aims to transform itself into an end-to-end financial technology company that faces stiff competition from market leader Paytm, owned by One97 Communications Ltd.

Under the deal, MobiKwik will acquire the Mumbai-based company’s technology and operations, as well as 14 employees who will join MobiKwik’s wealth management business.

The Clearfunds app and website will be integrated with MobiKwik to offer wealth management services to clients, Upasana Taku, co-founder and director of MobiKwik, told Mint in a telephone interview.

Founded in 2016, Clearfunds (Harvest Fintech Private Limited) is an online mutual fund advisory platform that claims to use data science and analytics to help investors make informed and profitable investment decisions. It claims to have $45 million in assets under management (AUM).

Founded by Kunal Bajaj, previously managing director at Jefferies India, along with Sarosh Irani and Jaideep Tibrewala, Clearfunds has all 36 asset management companies (AMCs) on its platform, which will now be offered on MobiKwik. Bajaj will take over as business head of MobiKwik’s wealth management division. .

MobiKwik, which has a customer base of 100 million, will now sell only direct plans on its platform, which do not carry a distributor commission. Paytm Money, the new wealth management unit of One97 Communications Ltd, entered the mutual fund space with its own app in April this year, Mint reported.

The Gurugram-based company will invest $15 million in its wealth management category next year to take on rivals like Paytm, which is reportedly looking to offer shares of listed companies directly to customers.

MobiKwik recently entered the digital lending services market by offering 90-second loans to its users in a bid to compete with Softbank-backed Paytm.

“We wanted to introduce a series of financial products based on payments. Now we want to repeat a similar journey by allowing users to invest their money in mutual funds, gold or deposits,” Taku said. “Experiences are currently broken, long-form and paper-based, and we want to revolutionize that.”

According to Bajaj, almost all mutual funds will be purchased digitally in the next few years. “It will be so easy that we would expect our user base to grow significantly as well,” Taku added.

The entry of players like Paytm and MobikWik, as well as Jio into the mutual fund distribution market, in the $22 trillion mutual fund sector, indicates the potential for growth in mutual fund penetration.

“Partnering with a leading platform like MobiKwik and being able to instantly make wealth management available to 100 million users is an attractive proposition,” Bajaj added.

Founded in 2009 by Bipin Preet Singh and Taku, MobiKwik started as an e-wallet company. It has invested ₹ 2 crore in Pune-based data science firm Pivotchain Solutions Technologies Pvt. Ltd in June this year to boost sales of its lending products.