Heading into 2018, mobile payment platform MoneyOnMobile was in a good place. While the company’s forward march was briefly halted by the dark, cashless cloud of demonetisation, it was now firmly in the ascendancy again. On the path to profitability, even.
In the third quarter of FY18, MoneyOnMobile posted revenues of $2.84 million, a year-on-year growth of 193%. The company’s net loss for the quarter stood at $0.42 million, a significant improvement from a loss of $1.11 million in the same quarter the previous year.
By all accounts, 2018 should have been a watershed year for the company. And indeed, it was shaping up to be just that. In January, the company raised $7.6 million through a Series F share issue, and two weeks later, in February, they raised a further $5 million from a Russia-based private aviation and aerospace holding company S7 Group. With money in the bank, the company had plans to uplist to the Nasdaq by summer; a move that would bring both visibility and liquidity.
By the third quarter of 2018, the company had enrolled over 3,50,000 merchants in 700 cities across India. It had over 350 employees on its payroll. Offices in Mumbai, Delhi, Kolkata, Hyderabad and Bangalore. It had processed over $2 billion and claims to have served over 200 million Indian mobile phone users since its inception.
But come August, the company was in turmoil. Harold Montgomery, Chairman and CEO of MoneyOnMobile, claims his company has been hijacked. An irate Montgomery—a US national—says that his Indian partners have betrayed the company. “The Indian partners betrayed our trust and broke our agreement,” says a livid Montgomery.
Since then, the company has filed an arbitration petition in the Bombay High Court, a lawsuit seeking $27 million in damages in the London Court of International Arbitration and a criminal case with the Mumbai Police against some of the company’s Indian partners, charging them with various cyber crimes.
MoneyOnMobile held great promise. It was a company that wanted to redefine financial inclusion. But it has become entangled in a web of deceit, greed and now, litigation. All of this, even as the company seemed on the verge of breaking even and going on to bigger and better things.
A visit to the company’s headquarters in Mumbai—a five-storey building in Malad, a prominent commercial business suburb—belies all this chaos. Employees sporting “MoneyOnMobile” ID tags were smoking outside the premises. Couriers filed in and out of the building. Nothing untoward, it would seem. The company’s VP of corporate communications, Navaz Damania, did her best to further this facade. “We have new investors on board and the company is going through a restructuring,” said Damania, attempting to dispel notions that anything was awry.
But it isn’t business as usual at MoneyOnMobile.