Online investment startup Groww, said on Wednesday that it has raised ₹154 crore in a Series B round led by American fintech focused fund Ribbit Capital. Its existing investors- Sequoia Capital India and marquee startup accelerator Y-Combinator, also participated in the round.
Founded in May 2017 by ex-Flipkart employees Lalit Keshre, Harsh Jain, Neeraj Singh and Ishan Bansal, Groww currently offers over 3000 mutual fund options for investment on its website.
Groww plans to use the funds raised to double its team size to 200 over the next year, and launch more products. While it currently offers only mutual funds, it wants to be a one-stop-shop for investment needs, co-founder and CEO Lalit Keshre told Mint in a phone interview.
“We are growing about 30% month on month, and have 2.5 million registered users, of whom more than 2/3rd are first-time investors. We want to grow this segment while catering to the wealthiest 100 million users in the country," Keshre said.
While its platform is currently free to use and it charges no commissions, it plans to monetize by offering a premium, subscription-based model, Keshre added. However, he did not state a timeline for the same.
“The idea is to launch all investments. However we will start with stocks, exchange traded funds, maybe digital gold, etc- products which can be sold digitally with ease, and move on to other products," Keshre said.
New investor Ribbit has been one of the most active foreign investors in the Indian startup space recently. In the last few months alone it has led rounds worth $250 million, with bets on Kunal Shah’s credit card startup Cred and payments firms BharatPe and Razorpay.
Wealth management startups, especially those which cater to niche and wealthier people, and have experienced founders have also seen rising investor interest. INDWealth, the wealth management startup launched by former Ibibo founder Ashish Kashyap, has raised $45 million in the past year from Steadview Capital and Tiger Global. Cube Wealth, founded by Citrus Pay’s Satyen Kothari, which enables financial planning, raised $2 million in a Series A round in October last year.
Groww raised a Series A round of $6.2 million in January this year, led by Sequoia, prior to which it had raised a pre-series A funding round of $1.2 million from Insignia Venture Partners, Y-Combinator, and prominent angel investors such as Cure.fit founders Mukesh Bansal and Ankit Nagori, among others.
Sequoia India has also been one of the most active fintech investors in the country, with over 30 investments, including Cred, Razorpay, insurance firm Turtlemint and stock management firm Smallcase, among others.
“Investment products such as mutual funds and stocks were traditionally sold offline through financial advisors, who were mis-incentivized to sell high commission products. Groww is taking a refreshing approach with a zero-commission mobile first model, enabling investors to make their own investment choices through a slick and easy user interface," Ashish Agarwal, principal at Sequoia India, wrote in a Medium post on September 6. Agarwal also oversees the Groww investment from Sequoia’s portfolio.