Groww To Acquire Wealthtech Startup Fisdom

IPO-bound investment tech unicorn Groww has signed a definitive agreement to acquire wealthtech startup Fisdom in an all-cash deal, sources told Inc42. 

The deal, which values Fisdom at about $150 Mn, is subject to regulatory approval.

With the acquisition, Groww is looking to expand its offerings in the wealth management space. 

“The move will bolster Groww’s capabilities and expand its offerings in the wealth management sector. With Fisdom’s expertise and established partnerships with 15 national and regional banks, including Punjab National Bank and Indian Bank, Groww will be able to enhance its offerings and expand its customer base,” one of the sources said.

Groww declined to comment on the development, while Fisdom was not available for immediate comment. 

The development comes more than two months after it was reported that Fisdom would be valued in a range of $140 Mn to $160 Mn. Back then, the two parties were in initial stages of discussion and Groww was said to be exploring other acquisitions as well. 

This is the second major acquisition by Groww after Indiabulls AMC. The fintech unicorn entered the asset management space in September 2023 when SEBI greenlit the launch of its first index fund. Currently, it offers 19 mutual fund schemes, including equity, debt, hybrid, index funds, and more. At the end of FY24, Groww managed a total AUM of INR 1.9K Cr. 

Groww To Expand Its Offerings Ahead Of IPO

The acquisition of Fisdom would enable Groww to further expand its services and enter new categories. Founded in 2015 by Anand Dalmia and Subramanya SV, Fisdom offers wealth management solutions, including mutual funds, stocks, bonds, portfolio management services (PMS), among others. It claims to have 1 Mn active customers across its services. 

The startup has raised about $42 Mn till date from investors like PayU, Quona Capital, Saama Capital, among others. It last raised $5 Mn at a valuation of $102 Mn in January 202. Thus, the acquisition by Groww is materialising at about 50% higher valuation for the startup. 

In its last disclosed financial results for FY24, Fisdom reported a net loss of INR 57.4 Cr, down about 19% from the INR 70 Cr loss it incurred in the previous fiscal. However, operating revenue surged 28% to INR 82.9 Cr during the year under review from INR 64.7 Cr in FY23. 

Meanwhile, Groww reported a net profit of INR 535 Cr in FY24 on an operating revenue of INR 3,145 Cr. 

The acquisition comes at a time when Groww is gearing up for its IPO. The unicorn is said to be looking to file its DRHP via the confidential route in the next two weeks. It is eyeing a valuation of about $7 Bn to $8 Bn for its public issue.

Ahead of this, the startup was on a spree to settle its long-pending cases with SEBI. Earlier this week, the markets regulator released two settlement orders pertaining to Groww. After paying INR 34.1 Lakh to settle a case that originated from a technical glitch on Wednesday, Groww paid INR 47.85 Lakh to settle a case pertaining to violation of stock brokers regulations.

Meanwhile, Singapore’s sovereign wealth fund GIC is also acquiring an over 2% stake in the IPO-bound brokerage. Earlier this week, Groww sought approval from the CCI for the said transaction.