Bengaluru-based debt asset investment platform GrowFix has landed a check of USD 2 million in its seed round from Rainmatter Capital, the fintech fund and incubator by stock trading platform Zerodha, and Better Capital.
A slew of entrepreneurs including Kunal Shah, founder, Cred; Praveen Jadhav, ex-CEO Paytm money; Lalit Kehsre, co-founder, Groww; Nitin Gupta of PayU; Abhinav Jain and Kalpak Chhajed, co-founders, Shop101, and Aakrit Vaish of Haptik, among others, also participated in the round, as per a report by local media YourStory.
GrowFix will use the new funding in developing technology to underwrite risks and educating retail investors about new-generation debt assets.
Founded in January 2020 by Ajinkya Kulkarni, Abhik Patel, Shashank Chimaladari, and Anshul Gupta, the startup enables retail customers to invest in high-interest rate, asset-backed fixed income products.
“Investors are actively looking for high-interest rate products for a reasonable risk,” said Ajinkya Kulkarni, co-founder, GrowFix in a statement. “Given the scenario where fixed deposit (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.”
“GrowFix is squarely aimed at addressing this massive market opportunity by creating high-interest rate products for these investors,” he added.
The startup launched its first asset in December 2020–a pool of gold-backed loans where retail investors could invest in and get an 11 % fixed interest rate. The company claims that 50% of the asset had been subscribed in the first four weeks.
In a statement, Nithin Kamath, founder and CEO of Zerodha said, most Indians today invest in illiquid assets like gold jewelry and real estate, which are hard to sell in times of emergencies. He said bank FDs that are relatively easier to liquidate don’t yield much.
“We just have about 25 million Indians who invest in stocks and mutual funds and this hasn’t grown much at all. 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,” Kamath said.