Bengaluru: GrowFix, an alternative debt platform that allows retail investors to invest in asset-backed fixed income products, has raised $2 million (around Rs 14.6 crore) in seed capital.
The round in GrowFix has been led by Rainmatter Capital, a fund backed by trading platform Zerodha. Early-stage venture firm Better Capital also participated in the round, the startup said in a statement.
GrowFix, operated by Fourdegreewater Pvt Ltd, was set up in January last year by Ajinkya Kulkarni, Abhik Patel, Shashank Chimaladari, and Anshul Gupta. The company says it is working with non-banking financial companies to help them raise retail capital.
The company will use the capital to develop technology to underwrite risks and conduct investor outreach about debt assets.
“Given the scenario where FD (fixed deposit) and debt mutual fund returns have dropped considerably, there is a huge vacuum for products that give 2-3% higher returns than FD and are less volatile than equities. GrowFix is squarely aimed at addressing this massive market opportunity,” Kulkarni said.
GrowFix says its proprietary algorithm identifies high-quality loan pools that are then enabled for access by retail investors. The company’s first product is called GrowFix Gold, which has a pool of gold-backed loans. It claims to have seen a 50% subscription to this asset in four weeks.
The early-stage investment in GrowFix represents a growing interest in the investment and asset management segment of the fintech sector. Companies in this space are leveraging algorithms to offer consumers customized products and market outperformance.