Tiger Global intends to lead $200 million funding round for Trading Platform Upstox

Tiger Global, one of India's most ardent sponsors of startups, is doubling down on the local online stock brokerage and investment sector.

According to the sources, the New York-based investment fund is in talks to lead a $150-200 million capital round in Upstox. Tiger Global is a current shareholder in the corporation, owning a 31% stake. Other investors in Upstox include Kalaari Capital and Tata Sons Chairman Emeritus Ratan Tata.

If the investment round is successful, Upstox will become a unicorn—a privately owned firm valued at $1 billion or more—and its valuation will be much greater than in the previous round. According to sources familiar with the negotiations, the Mumbai-based investing platform might be valued at more than $3 billion.

After collecting $251 million in a round-headed by Iconiq Growth in October, one of Upstox's competitors, Bengaluru-based Groww, which is also backed by Tiger Global, saw its valuation leap three times in six months to $3 billion. Tiger Global led an $83 million funding round in Groww in April, bringing the Y Combinator alumnus into India's ever-growing unicorn club this year. Tiger Global is a major investor in INDmoney, an online wealth management service founded by Ashish Kashyap, who previously co-founded travel platform Goibibo.

"The fact that Tiger is betting big on Upstox shows how optimistic it is on the sector," sources said. Across rival enterprises, the fund has made many bets in a particular sector.

Upstox received $25 million in a Series B investment round headed by Tiger Global in 2019. It has previously raised $4 million from Kalaari Capital and other investors.

The company's user base has grown from 2 million in January 2021 to over 6 million today, offering online stock market investment services, consulting services, and mutual fund investments. By March 2022, it hopes to have surpassed 10 million customers.

It competes with online investing platforms such as Groww, Zerodha, Paytm Money, Smallcase, and Times Internet-owned ET Money, which is owned by Upstox RKSV. Young retail investors who are flocking online for their initial investments and savings needs are driving the expansion of online platforms like Upstox and Groww.

“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 considered listing as a SPAC (special purpose acquisition company) in the United States, however, the proposal fell through. Thippesha Dyamappa, a former Amazon executive, was named chief technology officer earlier this year.