Mongolian QPay creator, Innovation investment launches IPO

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        Innovation Investment LLC held its bellringing ceremony on December 4 to open its IPO trading to the public in the trading hall of Mongolian Stock Exchange (MSE).

Innovation Investment first began operation in 2016 by developing QPay service. Later in 2017, the company officially established themselves as Innovation Investment LLC. Currently, Innovation Investment LLC operates with two subsidiaries: KKTT LLC, a provider of electronic payment services using QR codes, and DMS LLC, a mobile and web app developer for merchants. As for QPay, it was introduced in 2019. For example, only in 2022, a total of 63 million transactions were made through QPay. However, in the first 10 months of this year, the number of transactions increased, and 98.6 million transactions were made with a value of 4.7 trillion MNT. QPay service now has more than 3.2 million users and more than 14,000 system connected customers such as CU and Emart. Therefore, the market share of QPay transactions is forecasted to increase year by year, from 0.2 percent in 2018 to 12.5 percent by 2027.

Currently, 16 organizations and people own shares in the company. About 22 percent of it is owned by ICT Group. With their IPO launching, they are offering 20 percent of its company for a value of 8.3 billion MNT. They are selling almost 37 million shares of their company for 225 MNT per stock. The company first started operating profitably in 2021, and last year it operated with a profit of 3.5 billion MNT. In addition, the owners’ equity reached 6.1 billion MNT, and the Return On Equity (ROE) reached 78.4 percent. But by 2027, their profit is expected to increase four times and reach 14 billion MNT.

At the opening ceremony, Executive Director of MSE Kh.Altai said, “We are happy that Innovation Investment is launching its new product on MSE. Innovation Investment is an innovative technology-based company that has been working in the Mongolian market to influence the economic cycle of non-cash payments and fintech services to simplify the operations of commercial banks and NBFIs with digital money approval. As of 2022, the number of citizens’ total non-cash transactions increased by 37 percent over the last five years, and the number of transactions through QPay increased by 213 percent. This shows the company’s success and growth.”

Deputy Director of Financial Regulation Commission (FRC) T.Tserenbadral said in his speech, “FRC implemented policy measures to develop the capital market, to introduce new products and services to the market, and to increase the opportunities for domestic enterprises to attract longterm financing from the capital market. As a result, the value of the stock market has tripled in the last three years. Innovation Investment uses technological advancements to supply products and services to financial institutions, introduce opportunities to bring services closer to consumers and simplify them. Since the introduction of QPay service in 2019, it has cooperated with 12 commercial banks and more than 200,000 businesses and operators and has gained about 3.2 million users in a short period of time. It was quickly recognized by people and managed to take its place in the non-cash payment system of Mongolia.”

Amarjargal Munkhbat