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Insignia Ventures, Lightbridge Partners back online mutual fund seller Groww
Photo Credit: Satyakam Banerjee/VCCircle

Groww, an online platform that sells direct plans of mutual funds, has raised $1.6 million (Rs 11 crore) in a pre-Series A round led by Insignia Ventures Partners, Lightbridge Partners, Kairos. CureFit founders Mukesh Bansal and Ankit Nagori, its existing investors, also participated in the round, along with others.

The company will use the fresh funds to strengthen its technology infrastructure and build growth channels, it said.

Through its mobile app and web platform, Groww offers direct plans for mutual funds and helps users find a portfolio. Since direct plans do not involve intermediaries such as brokers and agents for sales, no commission is paid out to middlemen, resulting in savings for the investor. Regular plans, on the other hand, involve payouts to brokers and agents since they are sold through middlemen.

Groww says it leverages data science to make investing simple, accessible and transparent. It claims that a new user can start investing within a few minutes as the entire process, including the know-your-customer procedure, is paperless.

Incorporated as Nextbillion Technology Pvt. Ltd, Bengaluru-headquartered Groww was launched in April 2017 by former Flipkart employees Lalit Keshre, Harsh Jain, Neeraj Singh and Ishan Bansal.

“Our long-term goal is to make anything related to finance extremely simple and transparent for users, while providing them the best user experience,” Keshre said.

Groww claims to have partnered 34 fund houses. The company said it will launch more financial products and value-added services.

Groww is also building communities where users can ask questions, learn investing, and find assistance in investment decision-making.

In January this year, the company had raised an undisclosed amount in seed funding from Mukesh Bansal and Ankit Nagori, as well as US-based seed investor and accelerator Y Combinator.

“Groww is the right idea, at the right time, to enable and empower a new generation of investors in India to build their financial future at a younger age, and we're excited to be on the ground floor of this sea change," said Tan Yinglan, founding managing partner, Insignia Ventures Partners. Singapore-based Insignia was launched by Yinglan Tan, former Sequoia partner and CEO of Sequoia Capital (India) Singapore.

The firm focuses on investment opportunities in Southeast Asia and had reportedly closed its maiden fund at $120 million recently. Groww's other investor, Kairos, founded in 2008, is a startup community that connects entrepreneurs with innovators and investors. The firm had launched $25 million Kairos Fund last November, with an aim to fund start-ups with social missions.

Deals in the space

Several other startups, offering a range of wealth management services, have raised venture capital funds in recent times.

Most recently, mass-market mutual fund investment platform Nivesh.com raised seed funds of Rs 3 crore from online deal-making firm LetsVenture and a clutch of angel investors including Google India managing director Rajan Anandan and former Infosys global sales head Basab Pradhan.

In May, wealth management startup OroWealth received $1.6 million (Rs 11 crore) in a Series A funding round led by US-based venture capital firm Powerhouse Ventures.

Chennai-based fintech company Kaleidofin raised $2.8 million (Rs 18 crore) in a seed round led by Omidyar Network in April. Kaleidofin provides intuitive and tailored financial solutions to the informal sector, for which it has tied up with banks, non-banking financial companies and micro-finance institutions.

In March, Bengaluru-based online financial planning and investment platform Kuvera raised $250,000 (Rs 1.6 crore) in its second round of angel investment.

In February, Mumbai-based Fincash.com raised Rs 1 crore ($150,000) from a group of angel investors. The startup offers its users an online platform that helps investors transact as well as monitor their investments in mutual funds, wealth management products and other investments.

Other startups that have ventured into the online sale of financial products include Scripbox, Upwardly and RupeeVest.

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