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Upstox may hit $3 billion valuation in new funding round led by Tiger Global

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The Economic Times
25th November, 2021 19:37 IST

Bengaluru/Mumbai: Tiger Global, one of the most aggressive backers of Indian startups, is doubling down on India's online investment and stock brokerage market.

The New York-based investment fund is in the advanced stages of talks of leading a $150-$200 million funding round in online stock brokerage Upstox, according to people briefed on the matter. If the funding round goes through, it will not only make Upstox a unicorn but take its valuation significantly higher-in the range of around $3 billion, sources aware of the matter said.

Interestingly, Bengaluru-based Groww, which is also backed by Tiger Global, saw its valuation jumping three times in six months to $3 billion after raising $251 million led by Iconiq Growth in October. Earlier in April, Tiger Global had led a $83 million funding in Groww taking the Y Combinator alumnus to the ever-growing unicorn club in India this year. IND Money, an online wealth management firm, started by Ashish Kashyap—who had previously started travel portal Goibibo—also counts Tiger Global as one of its main investors.

“Tiger is making a significant bet on Upstox with the new round as an indication of its bullishness on the sector,” a person aware of the matter said. Tiger Global has made multiple bets in one sector in the past as well as it typically places a couple of bets in a space it is bullish on.

In October, Tiger Global made a first close of $8.8 billion for its largest-ever fund of $10 billion, which will be allocated in markets such as the US, China and India.

As part of the ongoing discussions, Upstox—which offers online stock market investment services, advisory services, mutual fund investments, may also see some of its early backers such as GVK Davix make a partial exit from the firm, according to sources. For Upstox—owned by Upstox RKSV—it competes with online investment platforms like Groww, Zerodha, Paytm Money, Smallcase and Times Internet-owned ET Money. Times Internet is part of the Times of India group which also publishes the Economic Times.

Platforms like Upstox, Groww are seeing user growth in number of users largely due to new-age retail investors who are coming online for their first investments and savings needs.

“The company is betting big on the robo-advisory and the gamification of investing models and is attracting investor interest for the same,” said one of the persons with knowledge of the company’s plans.

When contacted, a spokesperson of Upstox declined to comment while an email sent to Tiger Global did not elicit any response.

According to reports, Upstox was considering a SPAC (special purpose acquisition company) listing in the US but those plans did not work out.

In a statement issued earlier this month, the company’s cofounder Shrini Viswanath said the company is optimistic that it will close the current financial year 2022 with 10 million customers, from the current customer base of over 6.5 million. Earlier this year, it appointed former Amazon executive—Thippesha Dyamappa—as its CTO.

Venture fund Kalaari Capital, Ratan Tata are among the other investors in Upstox which has six cofounders according to startup data platform Tracxn—Ravi Kumar, Raghu Kumar, Shrinivas Viswanath, Viswanath Krishnan, Revathy Viswanath and Shyam Viswanath. Raghu Kumar left the startup in 2019 to start Rain Platforms in January last year but holds about 17.3% in the firm, data from Tracxn showed. Ravi Kumar holds 16.7% of the firm, as of March 2020, according to Tracxn data.

In 2019, Upstox raised $25 million in a Series B funding round that was led by Tiger Global, which now holds 31% in the firm. Prior to that, Upstox had raised $4 million in Series A funding in early 2016 that was led by Kalaari Capital.

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