Investment platform Groww is in talks to raise $150 million at a valuation of $4-$5 billion; it is in talks with a clutch of sovereign funds, sources said, as it continues to receive investor interest in a tepid funding environment. Its move to raise a fresh round comes six months after its $251 million Series E round, as it steps up efforts for its foray into neobanking.
The Sequoia and Tiger Global-backed company is said to have received interest from sovereign wealth funds such as Abu Dhabi Investment Authority (ADIA) and Qatar Investment Authority (QIA) as well as the Canadian Pension Plan Investment Board (CPPIB).
Founded by in 2016 by former Flipkart executives Lalit Keshre, Harsh Jain, Neeraj Singh and Ishan Bansal, Groww recently added Microsoft CEO Satya Nadella as an investor and advisor. In 2021, months after turning unicorn, Groww's valuation tripled to $3 billion across two funding rounds from investors like ICONIQ Growth, Ribbit Capital, YC Continuity, among others.
The startup which helps customers invest in mutual funds, domestic and US stocks, initial public offering subscriptions and fixed deposits is looking at expanding its offerings by adding government bonds and other fixed income products on the platform.
Besides these products, the company also plans to foray into neobanking and onboarded former Federal Bank executive Nilufer Mullanfiroze as its Head of Banking in November last year. Moneycontrol reported on March 17 that Groww is in talks to partner with Federal Bank to serve as the backbone for its neobanking platform.
Groww is also doubling down on its initiatives to spread financial awareness and education among Indians to help them make investment choices. The company has further been investing in extending its reach to under-penetrated geographies, strengthening its team, and scaling tech infrastructure.
Moneycontrol reached out to Groww for comments on the story. The company declined to comment.
Online investments saw a steep rise amid the pandemic as Indians increasingly looked at avenues with higher returns amid low interest rates in deposit products, job uncertainties and increased worries of health expenditure.
Stocks and mutual funds became the most preferred investments in the past year and a half as markets rallied soon after initial pandemic jitters. On the back of this increased interest, online investment platforms saw a surge in usage and Groww alone has 20 million users on its platform.
The company competes with players such as Zerodha, Upstox, Paytm Money and Angel Broking. New players like Dhan and Fisdom too have entered the stockbroking space with an aim to build a user base of one million in the next year.
However, a fall in stock markets globally coupled with rising crude prices is likely to impact investor sentiment and also slow down IPO activity temporarily.In FY21, Groww posted a loss of Rs 107 crore, but its parent company Nextbillion Technologies posted a profit of Rs 2.72 crore in the financial year ended March 31, 2021. The parent company’s revenue stood at Rs 40.4 crore, up from Rs 2.9 crore in FY20.