Tiger Global is placing a large bet on Uptox, an online stock market investment service, as the sector has recently turned bullish. Tiger, one of the most aggressive investors in Indian startups, is increasing its focus on the domestic online investment and stock brokerage market.
According to trade sources known to the development, the investment fund is in talks to lead a $150-$200 million funding round in Upstox. Tiger Global is already a shareholder in the company. If the funding round is successful, Upstox will not only become a unicorn (privately held companies valued at $1 billion or more), but it will also be valued significantly higher than in the previous round. According to sources familiar with the transaction, the Mumbai-based investing platform could be valued at $3 billion.
Tiger Global turns bullish on India Investments
Groww, based in Bengaluru and backed by Tiger Global, tripled its valuation to $3 billion in six months after obtaining $251 million in a capital round led by Iconiq Growth in October. Earlier this year, Tiger Global led a $83 million funding round in Groww, bringing the Y Combinator alumnus into India’s ever-growing unicorn club. Tiger Global is a major investor in INDmoney, an online wealth management service founded by Ashish Kashyap, who previously co-founded travel platform Goibibo.
“Tiger is placing a large bet on Upstox, with the current investment round indicating its bullishness on the sector,” a source familiar with the situation stated. The New York-based fund has made many bets in a single area, despite the fact that it is competing with other enterprises.
In 2019, Upstox raised $25 million in a Series B funding round that was led by Tiger. The US fund holds 31% in the firm. Prior to that, Upstox had raised $4 million in early 2016 in a funding round that was led by Kalaari Capital.
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.
The company, which is owned by Upstox RKSV, competes with online investing platforms like as Groww, Zerodha, Paytm Money, Smallcase, and the Times Internet-owned ET Money. The Times Group, which also publishes The Economic Times, owns Times Internet.
Users are flocking to platforms like Upstox and Groww, owing to the influx of new-age, youthful retail investors looking for their first investments and savings.
“The company is betting big on robo-advisory and gamification of investing models, and it’s gaining investor interest for it,” one source familiar with the company’s intentions said.
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 they were optimistic that the company will close FY22 with 10 million customers, up from the current customer base of over 6.5 million. Earlier this year, it appointed former Amazon executive, Thippesha Dyamappa, as its chief technology officer.
Venture fund Kalaari Capital, Tata Sons chairman emeritus Ratan Tata are among the other investors in Upstox.
The company was cofounded by Ravi Kumar, Raghu Kumar, Shrinivas Viswanath, Viswanath Krishnan, Revathy Viswanath and Shyam Viswanath, according to Tracxn data. Raghu Kumar left the startup in 2019 to launch Rain Platforms in January this year. He still holds about 17.3% in the firm, the Tracxn data showed. Ravi Kumar owns 16.7% in the firm, as of March 2020, according to Tracxn.