Instamojo plans to enter ad space, raise non-payments revenue share

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Bengaluru | Updated: January 2, 2019 9:14:36 PM

Instamojo is a payments company which focuses on small online sellers with sales of Rs 10-15 lakh annually.

The firm sets itself apart from payments gateways by saying that a customer only needs a bank and phone number, and needs to pay a flat fee.

Online payments and lending provider Instamojo will be launching their advertising service, Mojoads, by the end of 2018 and hopes to widen revenue shares coming from non-payments businesses.

Instamojo founder and chief executive Sampad Swain told FE that the ad services are still in alpha stage and the firm hopes to launch it by the end of this year. Just like its payments service, Mojoads will focus on micro, small and medium enterprises (MSMEs).

Instamojo is a payments company which focuses on small online sellers with sales of Rs 10-15 lakh annually.

Sellers generate a payment link and share it with their customers to accept payments. The company sets itself apart from payments gateways by saying that a customer only needs a bank and phone number, and needs to pay a flat fee while CC Avenue, BillDesk and others require integration which entails hefty charges and also an annual maintenance fee.

Instamojo had earlier this year launched its logistics service, Mojoexpress, and lending service MojoCapital. Swain said since the launch of these non-payments services, 10% of the company’s revenue comes from these. He expects these to contribute 30%-35% of revenue in the next three years.

The company’s expansion is being driven by its latest funding round which happened in August last year, with $4 million being raised from Kalaaria Capital and AnyPay. Kalaaria’s investment had saved the company from going stagnant. A similar situation had cropped up in December 2016 when it faced the prospect of shutting down.

While Instamojo is still in the red with its financials, Swain reiterated what most start-ups focus on, “Profitability is not a concern for me right now, growth will continue to drive us.” But, Swain said he had a set guidance for how much the company should grow in order to stay healthy. “We need to grow more than or equal to 3x per year.”

The company has been able to reduce its losses while increasing profits. FY17’s losses were at Rs 3.25 crore, a fall from Rs 5.18 crore a year earlier, and revenues grew to Rs 6.25 crore from Rs 3.96 crore in the same period the previous year.

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