[Funding alert] GrowFix raises $2M investment led by Zerodha's Rainmatter Capital, Better Capital

Alternate debt assets platform GrowFix has raised $2 million seed funding led by Zerodha's fund - Rainmatter Capital with participation from Better Capital. The funding will be used to develop technology to underwrite risks, educate investors about new-generation debt assets.

The round also saw participation from angels like Kunal Shah, Founder, CRED; Praveen Jadhav, ex-CEO Paytm money; Lalit Kehsre, Co-founder, Groww; Nitin Gupta of PayU and Uni; Vasanth, Anugrah, and Rohan, Co-founders, Smallcase; Indiagold founders Deepak Abbot and Nitin Misra; Nischal Shetty, Founder, WazirX; Sayali Karanjkar of PaySense; Sanat Rao, ex-partner, Chiratae Ventures; Akash Gehani of Instamojo; Sanjay Ramakrishnan of Multiple Ventures; Abhinav Jain and Kalpak Chhajed, Co-founders, Shop101, Devashish Chakravarty, Quez; and I Unnikrishnan of Yogloans.

ALSO READ

Why Nithin Kamath’s Rainmatter decided to set up a $100 million foundation

Angel syndicates Kushal Bhagia (FirstCheque); Adith Podhar and Vipul Rawal (Gemba Capital); Bounce Co-founders; Ramakant of Livspace; and Aakrit Vaish of Haptik also participated in the round.

Speaking on the announcement, Ajinkya Kulkarni, Co-founder, GrowFix, said: 

“Investors are actively looking for high-interest rate products for reasonable risk. Given the scenario where FD and debt mutual fund returns have dropped considerably, there is a huge vacuum for products that give two to three percent higher returns than FD and are less volatile than equities."

He added, "GrowFix is squarely aimed at addressing this massive market opportunity by creating high-interest rate products for these investors. This round of investment will help us develop technology to underwrite risks and educate investors about new-gen debt assets.”

Founded in January 2020 by Ajinkya Kulkarni, Ex-VP, Mswipe; Abhik Patel, ex-Growth Head, Shop101; Shashank Chimaladari, ex-Tech lead, Shop101; and Anshul Gupta, ex-Director and Head of Products, Northern Arc; the startup is an alternate debt assets platform for retail investors to invest in high-interest rate, asset-backed fixed income products.

It was founded with an aim to build the most trusted debt platform for retail and HNI investors in India. The startup had earlier raised funding from angels like Govind Rajan, ex-CEO, Freecharge; Ganesh Rao, Co-founder of Suroyday Small Finance Bank; Sumit Maniyar, Rupeek; Amit Chaudhary, ex- Partner, Motilal Oswal PE; and Vaibhav Domkundwar of Better Capital.

Nithin Kamath, Founder and CEO, Zerodha, said in the statement, “We just have about 2.5 crore Indians who invest in stocks and mutual funds and this hasn't grown much at all. Most Indians today invest in Illiquid assets like gold jewelry and real estate, which are hard to sell in times of emergencies. And then there are bank FDs that don't yield much."

"We think easy to understand, FD like, and safe asset-backed products created by GrowFix can be a great stepping stone to bring in a lot of first-time retail investors into the capital markets. The products are much easier to understand than debt mutual funds and also have attractive yields compared to bank fixed deposits, which is what most retail investors need today,” he added.

The startup launched its first asset in December 2020. The asset had a pool of gold-backed loans where retail investors could invest in and get an 11 percent fixed interest rate. The company has seen a great response from investors with 50 percent of it subscribed in four weeks.

GrowFix states it has built a proprietary algorithm to identify high-quality pools of loans that are enabled for retail investor access. The money is invested through listed debt instruments such as bonds and securitised debt instruments.