Fintech Buzz: Groww’s IPO Endeavours and Regulatory Developments
Your Daily ETtech Update
Happy Wednesday! In this edition of ETtech Morning Dispatch, we dive into Groww’s funding efforts as it prepares for its IPO, the Indian government’s regulatory shifts affecting tech firms, and the launch of a new fintech industry body. Read on for more details!
Groww in Talks for Pre-IPO Funding
Lalit Keshre, Co-founder, Groww
Fintech startup Groww is reportedly in discussions with several investors for a pre-IPO funding round. According to sources familiar with the matter, Singapore’s sovereign wealth fund GIC and existing backer Tiger Global are expected to invest approximately $200 million.
Valuation Surge Ahead
This fresh capital infusion could potentially double Groww’s valuation to $6.5 billion, compared to its valuation in 2021. This news comes at a time when the overall fintech market is experiencing a surge in investment activities.
Industry Insights
In a related development, Groww’s competitor, Dhan, is seeking to raise $200 million, aiming for a valuation of $1.2 billion. Furthermore, Fisdom is engaged in acquisition talks with Groww amidst the growing momentum in fintech deal-making.
Indian Government Scraps 6% Levy on Online Ads
The Indian government’s recent decision to eliminate the 6% equalisation levy on online advertisements is expected to benefit major tech firms while reducing compliance burdens significantly for businesses. This levy primarily targeted US tech companies like Google, Meta, and Amazon.
Details of the Policy Change
- The proposed change, part of the Finance Bill 2025, will take effect on April 1, pending parliamentary approval.
- This move is anticipated to alleviate US trade concerns and facilitate ongoing bilateral negotiations.
Expert Opinions
Dhruv Garg, founding director at the Indian Governance and Policy Project (IGAP), referred to the levy as a “sore point in India-US trade relations.” He indicated that its removal is likely to reduce advertising costs for Indian companies while fostering a positive trade atmosphere.
Formation of New Fintech Self-Regulatory Body
In a collective effort, notable fintech founders have launched a new industry organization aimed at securing approval from the Reserve Bank of India (RBI) to function as a self-regulatory organization (SRO).
About the New Entity
The new organization, tentatively named the Fintech Convergence Council (FCC), has been created as a successor to an existing council, striving for an SRO license from the RBI. Early members include prominent figures such as:
- Jitendra Gupta, Founder, Jupiter
- Sajith Narayanan and Sumit Gwalani, Co-founders, Fi
- Harshvardhan Lunia, CEO, Lendingkart
- Anurag Sinha, Co-founder, OneCard
A Vision for Inclusivity
One source highlighted the goal of making the organization representative of the complete fintech ecosystem, encompassing areas from payments to lending and digital currency.
Other Notable News from the Fintech Sphere
The Indian government has initiated efforts to invite private firms, including startups, to contribute anonymous datasets to the AI Kosh platform. This initiative is aimed at bolstering artificial intelligence development in India.
Market Outlook
According to Girish Mathrubootham, co-founder of Freshworks, AI could present a significant opportunity for India, potentially surpassing traditional software-as-a-service (SaaS) market prospects.
In a related conversation, Aravind Srinivas, CEO of Perplexity, discussed the minimal differentiation among leading generative AI products during a recent podcast with Zerodha co-founder Nikhil Kamath.
Additionally, Paytm Payments Services has announced a shift in its transaction processing approach, ceasing all operations with third-party platforms to streamline its services.
Global Picks We Are Reading
Questions and Answers
- What is Groww currently seeking in terms of funding?
Groww is in discussions for a pre-IPO funding round, aiming to raise around $200 million from investors, which could double its valuation to $6.5 billion. - What was the purpose of the 6% equalisation levy that has been scrapped?
The levy primarily impacted US tech companies like Google and Meta, serving as a tax on online advertising services. Its removal is expected to ease compliance for businesses in India. - What is the Fintech Convergence Council (FCC)?
The FCC is a newly formed industry body comprising fintech founders seeking to establish a self-regulatory organization (SRO) for the sector, pending approval from the RBI. - How might the removal of the advertising levy impact Indian businesses?
Experts believe that eliminating this levy will reduce advertising costs for Indian businesses and help improve trade relations with the US. - What is AI Kosh, and what is the government’s goal with it?
AI Kosh is an initiative inviting private firms to share anonymous data to advance artificial intelligence development in India, specifically to aid in training large language models.
