The New York-based investment fund is in talks to lead a $150-200 million funding round in Upstox, according to people briefed on the matter. Tiger Global is an existing investor in the company with 31% stake.
If the funding round goes through, it will not only make Upstox a unicorn — a privately held company valued at $1 billion or more—but also ascribe it a valuation that will be significantly higher than in the previous round. Sources privy to the deal details said the Mumbai-based investing platform may fetch a valuation of more than $3 billion.
When contacted, a spokesperson of Upstox declined to comment. An email sent to Tiger Global did not elicit a response.
One of Upstox’s rivals, Bengaluru-based Groww, which is also backed by Tiger Global, saw its valuation jump three times in six months to $3 billion
after raising $251 million in a round led by Iconiq Growth in October. In April, Tiger Global had
led an $83 million financing in Groww taking the Y Combinator alumnus to the ever-growing unicorn club of India this year. INDmoney, an online wealth management firm started by Ashish Kashyap—who co-founded travel portal Goibibo—also counts Tiger Global as one of its main investors.
“That Tiger is making a significant bet on Upstox is an indication of its bullishness on the sector,” a person aware of the matter said. The fund has taken multiple bets in a particular sector across competing firms.
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In 2019, Upstox
raised $25 million in a Series B funding round that was led by Tiger Global. Prior to that, it raised $4 million from Kalaari Capital and others in early 2016.
The company, which offers online stock market investment services, advisory services and mutual fund investments, has seen its customer base jumping from 2 million in January 2021 to over 6 million currently. It aims to cross 10 million customers by March 2022.
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 Group which also publishes The Economic Times.
Online platforms like Upstox and Groww are seeing user growth largely due to young 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 people with knowledge of its plans.
Upstox was considering a SPAC (special purpose acquisition company) listing in the US, but the plan did not work out. Earlier this year, it
appointed former Amazon executive Thippesha Dyamappa as its chief technology officer.
Kalaari Capital and Tata Sons Chairman Emeritus Ratan Tata are among the other investors in Upstox.