PC: The Economic Times
GrayQuest-an education loan-focused fintech startup-is set to raise a whopping Rs 53 crore ($6 million) in the Series B funding round where Pravega Fund and IIFL Fintech Fund have emerged as co-leads for this strategic round. The board of GrayQuest approved the issue of 6,228 fully paid up and 1,530 partly paid up Series B preference shares at an issue price of Rs 69,062 each, directed at bolstering the financial base of the company and further expanding plans.
Pravega Ventures and IIFL Fintech Fund, in a gesture of confidence and support, collectively poured in Rs 21.50 crore into GrayQuest, one believes, underscores the belief in the growth trajectory and market potential of this fintech startup. Founder Rishab Sumer Mehta also joined the fray with shares valued at Rs 10.56 crore. Significantly, the shares issued to Rishab are partly paid wherein the remaining amount is called upon as the board sees fit. This clearly once more gives an insight into the strategic way in which the capital has been allocated and its usage.
This infusion of fresh capital will play a fundamental role in fueling the expansion initiatives of GrayQuest while also servicing the company’s financial needs as depicted by the regulatory filings of the firm. Additionally, GrayQuest has increased the pool of ESOP by adding 1,204 new options, increasing the total ESOP pool to 5,718 options at an estimated valuation of $4.5 million, demonstrating efforts toward establishing a culture of ownership and influencing employee participation in driving company growth.
With a post-allotment valuation of around Rs 530 crore or $64 million, GrayQuest is readying itself for the transformational growth phase. The ongoing Series B funding round will bring more investment into its books, which may alter its valuation map significantly. Post-funding, Pravega Ventures will hold a 10.94% stake in the company, while IIFL Fintech Fund will secure a 4.07% stake in the ownership. Founder Rishab Sumer Mehta will hold a majority 38.59% stake, demonstrating his continued leadership and direction in the future progression of GrayQuest.
GrayQuest is an almost seven-year-old fintech player that specializes in a fee collection platform with the promise of an integrated solution for the education ecosystem, allowing parents to pay annual fees in monthly installments, interest-free. The company has signed on with the Co-Lab initiative led by HDFC Bank and Pravega Ventures, underlining its industry status and collaborative spirit in driving innovation in the education financing space.
Therefore, it seems that the growth trajectory of GrayQuest is also on an upbeat track in the financial year ending March 2023, based on its reported operating revenue of Rs 8.76 crore and a loss of Rs 26.3 crore. The FY24 results for the startup will be keenly looked at by market analysts and its stakeholders over its performance and growth indicators within the competitive fintech ecosystem.
Even in a larger industry context, GrayQuest, along with its peer companies like Leap, Auxilo, Avanse Financial, Financepeer, Propelld, Mpower Financing, and Eduvanz, has collectively raised a whopping $500 million in funding over the last 24 months, which would suggest strong interest from investors and market appetite for innovation in the area of education financing under the fintech solutions domain. Leap’s reported potential unicorn valuation in the next round is another revealing fact about sectoral growth potential and attractiveness to investors for high-growth opportunities in the fintech landscape.
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