Fintech Unicorn Groww acquires Indiabulls MF for INR 175 Cr

Groww

Indian online trading platform Groww, which has turned unicorn lately, has announced the acquisition of Indiabulls Asset Management Company Limited (IAMCL) and its trustee Indiabulls Trustee Company Limited for INR 175 Cr. The acquisition is subject to the approval of the market regulator Securities and Exchange Board of India (SEBI).

Founded in April 2017, Groww offers direct plans for mutual funds and a seamless and clear approach to investing via a mobile app and web platform. The founders of this startup are former Flipkart employees Lalit Keshre, Harsh Jain, Neeraj Singh, and Ishan Bansal. The startup competes with Steadview Capital and Tiger Global-backed IndWealth, Accel Partner’s portfolio company Scripbox and bootstrapped unicorn Zerodha.

Lalit Keshre, Co-founder & CEO of Groww said, “With the ability to manufacture products, we are planning to make mutual funds even more accessible. They are going to be simpler, more transparent, and cost efficient.”

Indiabulls will also leverage Groww’s platform and network of 1.5 Cr customers to expand its mutual fund product. The distribution platform and the mutual fund business are expected to be run as separate businesses.

In the year 2019-2020, Groww reported revenue of INR 76.16 Lakh, representing an 823% year-on-year (YoY) growth from revenue of INR 8.25 Lakh in the year 2019. Around INR 29 Lakh were earned through operations, whereas the remaining INR 47.12 Lakh were earned through many other sources like profit from the sale of investments and interest on deposits from banks.

Around the same time, the company’s expenses grew by 2,703%, from INR 31.76 lakh in 2019 to INR 8.69 Cr in 2020. Hence, its net loss for 2020 stood at INR 7.93 Cr, a 3,348% increase from a loss of INR 23 lakh in 2019. As they are into the 4th year of operation, because of numerous operational setups, the corporation is not able to earn profits.

Groww has raised around $142 Million thus far from marquee investors such as Sequoia Capital India, Ribbit Capital, Y Combinator Continuity Fund and others. The corporation has raised $83 Million in its Series D funding led by Tiger Global, at a unicorn valuation of $1 billion.

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