Digital investment platform for securitised debt instruments (SDIs), GrowFix has raised $2 Mn in a seed funding round led by Zerodha’s fintech investment fund Rainmatter, and participation from Better Capital.
The funding round also saw participation from 20 other entrepreneurs, including Cred’s Kunal Shah, Paytm Money’s former CEO Praveen Jadhav, PayU’s Nitin Gupta and India Gold’s Deepak Abbot.
Founded in January 2020 by Ajinkya Kulkarni, Abhik Patel, Shashank Chimaladari and Anshul Gupta, GrowFix offers high net-worth individuals and retail investors, asset-backed fixed income products which offer higher returns than fixed deposits.
Currently, the company offers GrowFix Gold and GrowFix Wheels, with an underlying asset of gold loans or vehicle loans, where retail investors are promised fixed interest rates of 10-11%.
The company has claimed that in a span of four weeks, 50% of the assets had been subscribed.
“Given the scenario where FD and debt mutual fund returns have dropped considerably, there is a huge vacuum for products that give 2-3% higher returns than FD and are less volatile than equities,” Kulkarni was quoted as saying by ET.
“We think easy-to-understand and safe asset-backed products created by Growfix can be a great stepping-stone to bring in a lot of first-time retail investors into the capital markets,” said Nithin Kamath, co-founder and CEO of Zerodha.
In 2020, fintech emerged as the best performing sector for the Indian startup economy, in terms of the amount of funding raised. Fintech startups raised $2.1 Bn in funding across 131 deals. Enterprise tech and edtech ranked second and third in terms of the funding raised.
The rise of D2C and ecommerce, as well as contactless payments, has widened the addressable market opportunity for fintech products, driving up investor confidence in the sector.
Among the four main fintech subsectors — payments, lending tech, insurance tech and investment tech — insurance tech (58%), investment tech (53%) and lending tech (44%) recorded the highest CAGR in 2015-2020 in terms of total funding.
In contrast, digital payments recorded a negative growth rate (-32%), indicating diminishing investor confidence towards this subsector due to market saturation caused by established players.