Nikhil Kamath’s Gruhas Invests In Finfluencer Sharan Hegde’s Edtech Platform The 1% Club

Zerodha cofounder Nikhil Kamath-backed venture capital (VC) firm Gruhas has invested INR 10 Cr ($1.2 Mn) in finfluencer Sharan Hegde’s financial edtech platform ‘The 1% Club’.

The funding was part of the pre-Series A round of the startup, which will use the capital to expand operations and attract talent. 

Founded in 2022 by finfluencers Hegde and Raghav Gupta, The 1% Club is a members-only financial education platform that offers educational resources, mentorship, entrepreneurial opportunities and networking avenues for its members looking to achieve financial independence. 

Terming The 1% Club as a social finance platform, cofounder Hegde said it combines the power of education with the convenience of fintech. 

Commenting on the investment, Gruhas cofounder Abhijeet Pai said, “1% club is addressing the issue of financial literacy and community building by combining essential data statistics with a unique way of communication that significantly increases reach and interaction with the current young… We are delighted to support Team Sharan and their vision for the 1% club.”

The investment thesis of Gruhas has largely been underpinned by the growing trend of finfluencers making a transition into entrepreneurship. The startup claims to be the first influencer-backed company to venture into entrepreneurship. Gruhas believes that the platform can help bridge the gap between finance and education. 

The 1% Club also said that it is in the ‘advanced stages’ of seeking registration with the Securities and Exchange Board of India (SEBI). Such a licence is mandatory and would enable the company to comply with regulatory norms and elevate its credibility in the fintech space.

The development comes at a time when several finfluencers have come under SEBI’s radar for offering illicit advice without any licence or expertise. The markets regulator has cracked the whip on big names such as PR Sundar, Syyed Shujauddin, and Ruchit Gupta this year for peddling misinformation and, in many cases, outright fraud.

The crackdown has largely been necessitated by the increasing reliance of users and retail investors on social media platforms and online forums for financial advice. SEBI even floated a consultation paper in August this year that proposed regulatory measures for unregistered finfluencers. 

The finfluencers have been mandated to first register with SEBI to deal in securities or partner with regulated entities.

As per a survey by the National Centre for Financial Education, a big chunk of the Indian public is prone to misinformation by unregistered financial influencers as just 27% of the population is financially literate.