Even though more than 150 million people use digital payment apps in India every month, only about 20 million of them invest in mutual funds and stocks. A company that is trying to change that just got a big backing by courting millennials.
Bangalore-headquartered Groww said it raised $30 million in its Series C funding round on Thursday. YC Continuity, Y Combinator’s growth-stage investment fund, led the round, with the participation of established investors Sequoia India, Ribbit Capital, and Propel Ventures. The latest round is taking the overall raise to $59 million for Groww, a three-year-old startup.
Groww enables consumers to invest in mutual funds, including systematic investment planning (SIP) and investments related to equities. The app retains a somewhat simple user interface to interpret the investing environment simpler for its predominantly millennial client base. It offers every fund available in India at this time.
The startup has expanded its offerings in recent months to enable users to buy stocks of Indian firms and digital gold, Groww’s co-founder and chief executive Lalit Keshre said in an interview with TechCrunch. Kesher and three other Groww co-founders worked for Flipkart before starting their startup.
Groww has accrued more than 8 million registered users for its mutual fund offering and more than 200,000 users have purchased stocks from the website, Kesher said. The new fund will allow Groww to further broaden its domestic presence and launch new products as well, he said.
One of those items is the opportunity to enable users to purchase stocks of companies and derivatives listed in the US, he said. The startup is testing that with select users already, he said.
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“We suppose that Groww builds India’s largest retail brokerage. We have known the founders at YC since the business was just an idea and they are some of the best people in the industry that you can encounter anywhere in the world. We are grateful to be partners with Groww as they create one of the world’s largest retail financial platforms, “said Anu Hariharan, YC Continuity’s partner, in a statement.
More than 60 percent of Groww users come from smaller Indian cities and towns and 60 percent have never made such investments before, Kesher said. The company holds seminars in various small towns to teach people about the investment environment. And here is where the prospects for growth lie.
“India is seeing increased involvement of retail investors in financial markets — with 2 million new stock market investors added in the last quarter alone,” Ashish Agrawal, Sequoia Capital India’s principal, said in a statement.
Conclusion:
Several existing financial firms such as Paytm have extended their offerings to include mutual fund investments. Amazon, which in recent months has been aggressively expanding its financial services catalog in India, also sells digital gold in the region.
