Groww to acquire Fisdom in a $150 million all-cash deal
Investment platform Groww has signed a definitive agreement to acquire wealthtech startup Fisdom in an all-cash deal, subject to regulatory approval from the Securities and Exchange Board of India (Sebi), according to people familiar with the matter.The acquisition will enable Groww, India's largest stockbroking platform with 13 million active users, to expand its presence in the wealth management space.
ET was the first to report on the impending deal on March 13.
The transaction values Fisdom at between $140 million and $160 million, according to sources Founded in 2015 by Anand Dalmia and Subramanya S.V., Fisdom offers wealth management solutions, including mutual funds, stocks, bonds, portfolio management services (PMS), and tax filing solutions.
Following regulatory clearance, Fisdom's founders will continue to run the business, and the existing team will remain with the firm, according to one of the sources cited.
Wealthtech expansionBacked by the likes of PayU, Saama Capital, and Quona Capital, among others, Fisdom serves over a million customers. Since its inception, the wealthtech startup has raised around $48 million, according to data from Tracxn, and was last valued at approximately $103 million in 2023.PayU is the largest shareholder with around a 30% stake, while Quona Capital holds 13.8%. Among the biggest winners would be Saama Capital, which invested around Rs 20 crore in the fintech and still holds 12.4%.Fisdom posted revenues of Rs 84 crore in FY24, marking a 28% increase from the previous year, while reducing its net losses by 19% to Rs 57.4 crore. The company also achieved Ebitda profitability in the March quarter of FY24.
The ten-year-old company has forged partnerships with 15 national and regional banks, including Punjab National Bank and Indian Bank, helping these lenders offer wealth management products to their customers. The acquisition of Fisdom will mark Groww's entry into the highly competitive and rapidly growing wealth management sector, which has been attracting significant investor interest amid the Indian stock market's bull run.In recent years, players like Centricity, Dezerv, and Ioniq Wealth have all secured equity funding to tap into this emerging opportunity.
Groww's IPO and funding
The acquisition comes as Groww prepares to file its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (Sebi) for a planned $700 million public listing. According to sources, Groww intends to file its DRHP through the confidential route by the end of this month.
The company is also in the process of raising between $250 million and $300 million in a funding round led by Singapore's sovereign wealth fund, GIC.
On May 15, GIC sought approval from the Competition Commission of India (CCI) to acquire a 2.14% stake in Groww for a $150 million investmentm. This deal would value Groww at $7 billion, post-money, according to people familiar with the matter.
Launched in 2016, as a mutual fund investment platform, Groww diversified into stocks, IPOs, and ETFs in 2020. The company became profitable in FY23, reporting revenue of Rs 1,277 crore and a profit of Rs 449 crore. In FY24, Groww's revenue surged to Rs 3,145 crore with an operating profit of Rs 535 crore. However, it reported a net loss of Rs 805 crore in FY24 due to a one-time tax payout to US authorities following the reverse flip of its parent entity to India.
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