Upstox to take on Groww, Zerodha with Tiger Global’s $200 mn push

Online brokerage start-up, Upstox has zoomed into the unicorn club with a valuation of $3.5 billion with a fresh round of funding of $200 million, which was led by the New York-based investment major, Tiger Global. With this, the investment firm has acquired a 30 per cent stake in Upstox, according to sources. 

BusinessToday.in has exclusively learnt that Tiger Global led the majority of the $200 million funding in Upstox as against the reports which earlier said that broking company had raised $25 million.

Of all the recent Tiger Global investments in India’s start-up ecosystem in past several months, this is one of the largest bets for the investment firm in online brokerage space, which has been dominated by bootstrapped unicorns, Zerodha and Groww. Interestingly, Tiger Global had also led the $83 million investment in Groww in April this year.

In terms of valuation, Upstox, however, has raced ahead of Zerodha (whose valuation is pegged roughly at $2 billion) and Groww (at $3 billion). Groww CEO, Lalit Keshre earlier told BusinessToday.in that the emergence of new players in the sector will not deter the pace of each company’s growth as the stock market investment sector in India is hugely underpenetrated as compared to developed economies like the US.

The COVID-19 pandemic has offered more tailwinds to the segment with the number of retail investors having seen a substantial spike especially with the advent of mobile first platforms that offer seamless investment options and expertise.

Upstox, which is also backed by Ratan Tata, had last raised $25 million in 2019 at an unknown valuation and claims that in FY21 the customer onboarding surged more than 3-fold, with nearly 2 million customers in January 2021 to now over 7 million customers. Founded by Ravi Kumar, Kavitha Subramanian and Shrini Viswanath with an aim of disrupting the nascent online brokerage sector in India, Upstox became the first online brokerage to launch unlimited trading plans at a fixed price for encouraging India’s millennial population to invest in the stock markets.

The company had also turned profitable in FY19 by logging in Rs 13.06 crore profit, but reported losses the next financial year at Rs 38 crore.