Only six months after becoming a unicorn, mutual fund and stock investment platform Groww announced on October 25 that it has raised $251 million in a Series E funding round, tripling its valuation to $3 billion amidst the unabated funding boom in Indian startups.
The investment round was driven by US-based financing firm ICONIQ Growth and also witnessed participation by Alkeon, Lone Pine Capital, and Steadfast. Groww’s existing investors, Sequoia Capital, Ribbit Capital, YC Continuity, Tiger Global, and Propel Venture Partners also participated in the round.
How the funds will be used
Groww intends to use this fundraise to increase its reach to under-penetrated geographies, strengthen its team, and scale tech infrastructure. The company also plans to maintain making significant investments in expanding financial education and information.
“We will look at adding government bonds and other fixed-income products. We are also launching derivatives. Plus, there is a lot more to build for our mutual funds vertical itself,” the company’s co-founder and CEO Lalit Keshre stated.
Founded in 2016 by four Ex-Flipkart executives – Lalit Keshre, Harsh Jain, Neeraj Singh, and Ishan Bansal – Groww’s platform helps users invest in stocks, mutual funds, exchange-traded funds, IPOs, US stocks, futures and options, and gold.
Groww’s platform boasts over two million active investors in stocks it claims to have acquired in the last 12-15 months. The company said its total user base is around 20 million, and monthly active users hover between 8-9 million.
Keshre said exchange-traded funds were among the more famous products on the platform. “The financial services market in India is already large, multiplying, and ripe for disruption,” said Yoonkee Sull, partner at Iconiq Growth. “During the last couple of years, Groww has demonstrated that they are ready to seize that opportunity through strong accelerating momentum predicated on the strength of technology.”
Competitors Zerodha and Flipkart founder Sachin Bansal’s Navi Technologies recently received Sebi approval to begin their own AMCs.
Groww started its new platform with additional features in May 2017. The user response was overwhelming. The online firm acquired 6 times more users compared to their first-month expectation. From that time onwards, Groww kept growing and became one of the trusted platforms for investment.
Since Groww’s 60% registered users belong to small cities, the company started a financial awareness program “Ab India Karega Invest” in January 2020. Through this program, Groww conducted workshops in small cities to provide investment-related knowledge.
The firm selected 52 small cities for 52 weeks to conduct investment-related conferences. For pilot testing, the company choose Lucknow, Jaipur, and Patna as their initial destinations.