Invest in Credit Risk Mutual Fund or not?

Consumers, keen to take the first few baby steps in the world of investment, have mentors lined up to woo them. On the menu are a host of innovative products that aim to make the paradigm shift of saving to investment a reality.

The bonus is that many of these mentors are new found Unicorns of India and accordingly they are on a new high.

This is great news for the end consumer.

Three out of the nine unicorns of 2021 – Cred, Digit Insurance and Groww – are from the fintech space and their line of business caters to building financial literacy. As a result the uninitiated are getting initiated into the world of investing.

Groww, the Bengaluru-based start-up focused on millennial investments, raised $83 million in a funding round led by US firm Tiger Global Management, thus becoming the fourth Indian venture to enter the unicorn club last week.

Company’s co-founder Lalit Keshre sees the unicorn tag more as a responsibility than a challenge to live up to Unicorn’s goal of financialising India.

“More than excitement or challenge, there is a strong sense of responsibility to bridge the financial gaps within the country. There are so many customers whom we haven’t touched and our goal is to inform and educate them,” Keshre told Money9 in an exclusive interview.

The company, whose valuation jumped multi-fold in the last few months, has raised more than $142 million since its founding. Groww’s existing investors such as Sequoia India, YC Continuity, Ribbit Capital, and Propel Venture Partners participated in the latest round as well.

Alongside Keshre, the fintech company was co-founded by Harsh Jain, Neeraj Singh, and Ishan Bansal – all four ex-employees of e-commerce giant Flipkart – with an aim to popularise financial literacy.

“Shallow financial penetration across the country was a trigger for us to start Groww. More than 25 crore Indians had fixed deposits but hardly did anyone invest in other products. We realised there was a lot of miss-selling of investment-related products as well due to lack of financial literacy. Hence, instead of selling investment products, we at Groww educate people about them,” Keshre asserted.

He further said information dissemination had now become easy with the popularity of platforms like Groww.

“Today there is significant increase in the financial penetration within the country. There is more accessibility and people are in control of their expenses and investments. It’s a positive sign but there is a long way to go from here,” he added.

More than 2 million Demat accounts were opened on Groww since June 2020, the company stated. Back then, it introduced stocks with an easy-to-use interface for do-it-yourself (DIY) customers.

Out of the 15 million registered users, Groww claims two-third are first time investors. The online trading platform which allows users to invest in stocks, mutual funds, exchange-traded funds, initial public offerings and gold faces fierce competition from companies like Zerodha, Upstox and Paytm Money.

“The new capital will help us invest in new products, acquire talent, and continue building our financial education platforms,” Groww co-founder said.

Groww now gives company to the likes of Gupshup, Meesho, Cred and PharmEasy who also joined the Unicorn Club in 2021.

Digit Insurance, Five Star Business Finance, Infra. market and Innovaccer were other companies that joined the unicorn club during January-March this year.