Groww’s valuation grows to $3 Bn after $251 Mn Series E round

Millennials-focused investment app Groww has raised $251 million as part of its Series E financing round led by Iconiq Growth, at a valuation of $3 billion. 

Existing investors including Sequoia Capital, Tiger Global, Ribbit Capital, and YC Continuity participated in the round which also saw participation from new investors like Alkeon, Lone Pine Capital and Steadfast.

At $3 billion, the company’s valuation has tripled in six months when it had raised $83 million in its Series D funding round led by Tiger Global to become a unicorn. Entrackr was the first to report on this round.

So far, Groww has raised close to $400 million. 

The company will use the fresh funds to expand its technology infrastructure and expand its reach in under-penetrated regions. Groww will also use the funds to create awareness about investment products. 

One thing to note is that along with Groww, Tiger Global is also an investor in some of its biggest competitors such as INDMoney and Upstox. The company’s other key rivals include Zerodha and Paytm Money, among others. 

Groww allows users to invest in mutual funds, stocks (including Futures and Options), digital gold and fixed deposits. Recently, the company has also launched a service for users to be able to invest in US stocks. 

The company claims to have over 20 million users out of which around 70% come from tier-2 and 3 cities. 

While Groww is yet to file its annual statement for FY21, according to Fintrackr, the company recorded a healthy surge in earnings which jumped 4.7X to a little over Rs 1 crore in FY20 from only Rs 20.14 lakhs in FY19. 

However, the company’s losses also shot up over 34 times to close to Rs 8 crore in FY20 compared to Rs 23 lakh in FY19. 

The company pumped money into its operations to accommodate for the increased scale and as a result, its total expenses shot up 20.3X to Rs 8.92 crore in FY20 from less than Rs 45 lakhs in FY19.

The most popular service used by investors on Groww is mutual fund distribution which made up 54% of the operating revenue and accounted for the biggest collections for the company in FY20.