Groww Raises $251 Mn, Valuation Triples To $3 Bn

SUMMARY

Groww plans to use the funds to expand geographically, strengthen the team, scale tech infrastructure, add more financial products and services and spread financial education and awareness

The round also saw participation from Alkeon, Lone Pine Capital, Steadfast and Groww’s existing investors Sequoia Capital, Ribbit Capital, YC Continuity, Tiger Global, and Propel Venture Partners

In FY20, Groww, which claimed to have 10 Mn+ users, reported a net loss of INR 7.93 Cr, a 3,348% jump from INR 23 Lakh in FY19

Wealth management startup Groww, which raised $83 Mn in its Series D round in April this year at unicorn valuation, has raised $251 Mn at the valuation of $3 Bn led by ICONIQ Growth.

The round also saw participation from Alkeon, Lone Pine Capital, Steadfast and Groww’s existing investors Sequoia Capital, Ribbit Capital, YC Continuity, Tiger Global, and Propel Venture Partners.

The startup plans to use the funds to expand its reach to the under-penetrated geographies in the country, strengthen the team, scale tech infrastructure and add more financial products and services to its platform. The startup also plans to make investments in spreading financial education and awareness.

Launched in 2017 by ex-Flipkart employees Lalit Keshre, Harsh Jain, Neeraj Singh and Ishan Bansal, Groww provides users with direct plans for mutual funds investing via its mobile application and web platform. It also offers stocks, ETFs, IPOs and gold provisions on its platform.

The investment tech startup also recently acquired 13-year-old Indiabulls’ mutual fund business for INR 175 Cr to diversify its business offering.

In FY20, Groww, which claimed to have 10 Mn+ users, reported a net loss of INR 7.93 Cr, a 3,348% jump from INR 23 Lakh in FY19. In addition, the startup also saw a spike in its expenses by over 2,500%, from INR 31.76 Lakh in FY19 to INR 8.69 Cr in 2020.

India’s fintech market is currently one of the fastest-growing compared to the rest of the world. Despite the first two waves of the Covid-19 pandemic that wreaked havoc across most sectors, the innovations brought about in the fintech space have helped India maintain a cutting edge. The country has the highest fintech adoption rate at 87% against a global average of 64%.

In Q3 2021, fintech startups raised $2.7 Bn in funding. Out of the total 79 deals reported in fintech, about 18% or 14 deals were recorded by the investment tech sector. The sector attracted $200 Mn in funding.

The Indian investment tech market is poised to grow to over $60 Bn by FY25, from its current market size of $20 Bn. Major players, in direct competition with Groww, include Zerodha, Paytm Money, Upstox, ETMONEY, Amazon-backed Smallcase and other traditional brokerage and investment firms.