Upstox eyeing to acquire financial services firm this year
MUMBAI: Online brokerage firm Upstox, which is backed by global investor Tiger Global, is looking to acquire a company in the financial service sector in the current financial year. The company, with a cash reserve of over Rs 1,000 crore, wants to acquire a company in the mutual fund, lending or insurance sector.
“We are extremely well capitalised, so there is no need for us to raise capital. In fact, we are at a point, where we are looking for high-quality acquisitions and investment opportunities in other companies,” Ravi Kumar, co-founder and chief executive, of Upstox told this newspaper. “We are looking at the companies which are not into the core broking business but are in adjacent sectors.
Our potential targets could be high-quality NBFCs (Non-Banking Financial Companies), Asset Management Companies (AMCs), insurance companies and lending firms. The acquisition is possible in the current financial year,” he added,” he added. The company, which competes with rivals like Zerodha, had raised $100 million as part of Series C funding in January 2022 and it does not have any fundraising plans at present.
The acquisition will grant Upstox a quick entry in other segments such as insurance or asset management where a licence is needed to start a business. Getting a licence to start an asset management company or insurance company takes around six to 12 months.
“We do not have a licence for insurance, NBFC or AMC. The acquisition will help us to get these licenses,” Kumar said. “By acquisition, we will not only get just the licence, but we would also get a team and a working business. The idea behind the acquisition is that the business should be complementary,” he added.
“We are growing very well in India. In the previous financial year, which was a bad year, we grew at around 40%,” he added. Currently, the company which was founded in 2009 serves 1.1 crore customers across the country, with over 85% of them being in non-metro cities and 70% being first-time investors.