Hardeep Singh
Groww is set to grow even more
Many companies appear to be interested in launching mutual funds. At least eight new fund firms are in the process of launching their operations. Groww, an online investing platform that allows you to purchase and sell mutual funds, is one of them (MFs).
Groww is an online-based investing platform that allows users to invest in mutual funds and equities directly. The firm, which is located in Bangalore, Karnataka, has generated over $140 million and is valued at $1 billion as of April 2021.
Groww was founded in 2016 by former Flipkart employees Lalit Keshre, Harsh Jain, Ishan Bansal, and Neeraj Singh as a Mutual Funds Investment Platform. The firm began its operations by communicating with members on themes related to investment and financial advisory using WhatsApp Groups and other social media platforms.
The firm entered the stockbroking business in 2020. Direct investments in mutual funds, equities, stock splits, digital gold, and exchange-traded funds are now available on the platform.
Acquisitions and Funding of Groww
- The firm has a market capitalization of $1 billion (as of May 2021) and has raised over $142 million from investors so far.
- Insignia Ventures Partners, Lightbridge Partners, Kairos, and others lead a $1.6 million pre-series round of fundraising for Groww in July 2018.
- Sequoia Capital India led a $6.2 million Series A round of fundraising for the Startup in January 2019.
- It secured $21.4 million in September 2019 as part of a Series B fundraising round headed by Ribbit Capital of the United States, with participation from previous backers Sequoia India and Y Combinator.
- The firm secured $30 million in Series C fundraising in September 2020, spearheaded by YC Continuity and previous investors.
- In April 2021, the firm became a unicorn after receiving $83 million in a Series D investment round valued at over $1 billion. Avijeet Bhujabal owns US$834 million in stock and will formally launch the Forbes Billionaire Index in October of 2021. In the fiscal year 2020-21, the 19-year-old raised US$834 million, or around INR.6370 crores, making him the advance taxpayer.
Groww Acquires Indiabulls
Indiabulls Asset Management Company was acquired by Groww. Indiabulls MF is one of the smaller fund firms in the Rs 32 trillion market, with assets of Rs 594 crore. Groww has benefited from a recent Securities and Exchange Board of India (SEBI) rule that eased the profitability requirements for sponsor firms wishing to establish a mutual fund.
In recent months, platforms like Groww, Zerodha, Paytm Money, and Upstox have experienced a spike in the number of transactions on their platforms as more and more first-time investors sought to put their funds in financial instruments in the wake of the pandemic.
Because of the demand for their original products, these platforms have expanded their services from mutual funds and equities to ETFs, derivatives, and initial public offerings (IPOs) during the previous year. Upon the legislative front, a relaxation of regulations has aided these businesses in achieving new heights.
The Securities and Exchange Board of India waived mandatory restrictions for newcomers in the mutual fund market, including five years of expertise in the financial services industry, three years of profit, and a net worth of Rs 50 crore, in December, clearing the way for more fintech to enter the field.
The alternative investment fund and portfolio management service businesses will be retained by Indiabulls Housing Finance when they are demerged from the Indiabulls Asset Management Company, according to a press statement from the two firms.
Groww has decided to enter the mutual fund sector by acquiring a fund house that already exists. According to industry insiders, SEBI might take up to a year to accept a sponsor firm’s license. SEBI examines the fund house’s risk management processes and checks the legitimacy of its fund management teams, directors, and trustees, among other things.
SEBI also pays a visit to a freshly established fund house’s office to inspect its physical equipment and trading rooms. It grants the license after it is fulfilled.
Future of Indiabulls AMC’s schemes
Purchasing an existing fund house isn’t as simple as it appears. The purchase includes ancient projects, many of which may be too small and unproven. Indiabulls AMC has been around for over a decade. It includes ten different debt, equity, and hybrid strategies. Large-cap and tax-saving equity funds are two types of equity funds.
Its largest equity fund is only worth Rs 112 crore. Other major schemes are Indiabulls Overnight Fund (Rs 192 crore) and Indiabulls Liquid Fund (Rs 115 crore). Only corporate surpluses and short-term surpluses are often invested in such programmes.
The previous plans of Indiabulls AMC have been ordinary to poor performers. It would be interesting to observe how Groww re-energizes the existing fund management staff, as well as which existing schemes it will keep in their current form or modify.
Let’s see how Groww will Grow its company in the coming years. Comment down your views regarding which Fintech company will get the number 1 spot in coming years.
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