New Delhi: Digital payments company MobiKwik has acquired online mutual fund platform Clearfunds in an all-stock deal, as it pivots towards a complete fin-tech company facing tough competition from market-leader Paytm, owned by One97 Communications Ltd.
As a part of the deal, MobiKwik will take over the Mumbai-based company’s technology, operations and 14 employees, who will join the wealth segment at MobiKwik.
Clearfunds app and website will be integrated with MobiKwik’s to offer wealth management services to customers, Upasana Taku, co-founder and director MobiKwik told Mint in a telephonic interview.
Founded in 2016, Clearfunds (Harvest Fintech Private Limited) is an online mutual fund advisory platform that claims to use data science and analysis to help investors make informed and profitable investment decisions. It claims to have $45 million in assets under management (AUM).
Started by Kunal Bajaj, previously managing director at Jefferies India, along with Sarosh Irani and Jaideep Tibrewala, Clearfunds has all 36-asset management companies (AMC) on its platform, which will now be offered on MobiKwik. Bajaj will take over as the business head of the wealth management business at MobiKwik. .
MobiKwik, which has a customer base of 100 million, will now sell only direct plans on its platform that come without distributor commissions. Paytm Money, the new wealth management unit of One97 Communications Ltd, entered the mutual fund market with its own application in April this year, Mint had reported.
The Gurugram-headquartered company will invest $15 million in its wealth management category in the next year to take on competitors like Paytm, which in turn is reportedly looking to offer shares of listed companies directly to customers.
MobiKwik recently entered digital lending services by offering 90-second loans to it’s users in a bid to compete with Soft-bank backed Paytm.
“On the foundations of payment, we wanted to bring a shoot of financial products. We now want to replicate a similar journey in terms of allowing users to invest their money in mutual funds, gold or deposits," said Taku. “The experiences right now are broken, long-minded and paper driven and we want to revolutionize that."
According to Bajaj, over the next few years almost all mutual funds will be bought digitally. “It will be made so simple that we would also expect a significant uptick in our user base," added Taku.
The entry of players like Paytm and MobikWik, along with Jio in the MF distribution business, in the $22 trillion mutual fund industry signal the potential towards higher mutual fund penetration.
“It is attractive to work with a leading platform like MobiKwik and be able to give access to wealth management to 100 million users instantly," added Bajaj.
Founded in 2009, by Bipin Preet Singh and Taku, MobiKwik started as an e-wallet company. It invested ₹ 2 crore in Pune-based data science-company Pivotchain Solutions Technologies Pvt. Ltd, in June this year to provide a boost its lending products.