Raise Financial Services, the company behind the trading app Dhan, is in preliminary talks to secure approximately $100 million in a new funding round. This investment could elevate the company’s valuation to between $1.2 billion and $1.5 billion, potentially earning it unicorn status, according to sources familiar with the matter.
Investment banking firm Avendus has been shortlisted to oversee the fundraising process. Founded by former Paytm Money CEO Pravin Jadhav in January 2021, Dhan competes with prominent rivals such as Zerodha, Groww, and Angel One.
The planned fundraising comes at a time when Indian stock markets are reaching new heights due to strong retail participation. This optimism persists despite government and regulatory concerns about increased futures and options (F&O) activity.
India has produced only three unicorns this year—Porter, Krutrim, and Perfios—as investors remain cautious following the investment boom of 2021. This caution underscores ongoing investor interest, though selective about which companies receive backing. Notable new-age firms like Zepto and Meesho have managed to secure substantial funding this year.
For Dhan, this upcoming round represents its largest fundraising effort since inception. The company’s valuation is poised to surge from around $150 million to an impressive $1.2-1.5 billion. The new funds will support business expansion and competition against other market players. While Dhan currently offers investing and wealth management services, it is also expanding into financing, payments, insurance, and other areas to capture a larger market share.
Discussions are still in their early stages, and formal negotiations have yet to commence. The funding round is expected to include both new investors and existing supporters, such as Beenext, Mirae Asset Venture Investments, 3one4 Capital, and Rocketship.vc.
Sources indicated that Dhan’s strong financials—an annual revenue run rate of $100 million (approximately Rs 830 crore) and a net profit margin of 40%—support its high valuation. This valuation would imply a revenue multiple of around 12-15X. For context, Angel One, a publicly listed competitor, achieved $500 million in sales for FY24 with a market capitalization of $2.3 billion, translating to a revenue multiple of about 4.5X.
Dhan’s rapid growth, marked by a 330% year-over-year increase in its user base, contrasts with stagnation or decline seen in some rivals as competition intensifies. Dhan’s active client base rose from 380,000 in January to 610,000 by June, according to NSE data. In comparison, Paytm Money’s active users decreased from 800,000 to 770,000 over the same period.
In its bid to remain competitive and expand revenue streams, Dhan has recently introduced mutual fund investment services and plans further diversification into lending, payments, and insurance. This strategic expansion aims to capture a greater share of the market amid growing competition in the discount broking sector.
