Wealthtech unicorn Groww has signed a definitive agreement to acquire wealth-tech startup Fisdom in an all-cash deal, subject to regulatory approval, according to sources aware of the matter. The acquisition comes as Groww prepares to file its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) within the next 10-14 days.

This marks Groww’s second major acquisition after its purchase of Indiabulls Asset Management Company (AMC) in May 2023, signaling the company’s expansion strategy ahead of its planned public listing.Founded in 2015 by Anand Dalmia and Subramanya S.V., Fisdom offers digital wealth management solutions including mutual funds, stocks, bonds, portfolio management services (PMS), and tax filing solutions.“This strategic move is expected to bolster Groww’s capabilities and expand its offerings in the wealth management sector,” said a person familiar with the matter, who requested anonymity as the deal has not been officially announced.

Fisdom serves over 1 million customers through more than 15 offices across India and has secured backing from prominent investors such as Prosus, Saama, and Quona Capital. The company’s established partnerships with 15 national and regional banks, including Punjab National Bank and Indian Bank, are expected to provide Groww with valuable distribution channels.

Fisdom posted revenue of Rs 84 crore in FY24, a 28% increase from the previous year, and reduced its net losses by 19% to Rs 57.4 crore. The company also reportedly achieved EBITDA profitability in the March quarter of FY24.

The acquisition comes as Groww is looking to raise approximately $200-250 million in a pre-IPO funding round led by Singapore’s sovereign wealth fund GIC, which is expected to invest about $150 million. This financing round would value Groww at around $7 billion post-money, marking a substantial increase from its last private market valuation of $3 billion in 2021.