Hornbill Capital submits $200 million bid to invest in Dhan at $1.25 billion valuation

Hornbill Capital, an India-focused hedge fund anchored by Asian private equity firm Orchid Asia, has entered the race to invest in stock trading platform Dhan, submitting a $200 million bid at a $1.25 billion pre-money valuation, people briefed on the matter said. This adds another contender to the ongoing funding talks in one of the most chased deals.

ET reported on February 7 that ChrysCapital was in talks with Dhan for a $100-150 million financing, valuing it nine-to-ten times more compared with the previous valuation of the four-year-old startup. Now, with Hornbill Orchid making its bid, this is the biggest offer in terms of total funding, people briefed on the matter said.

The hedge fund led a $210 million funding round in edtech firm PhysicsWallah in September and its bid for Dhan underscores the growing interest in new-age companies. Interestingly, it is an investor in Angel One – one of Dhan’s rivals. Hornbill picked up a stake in logistics startup Blackbuck through public market shares. It had previously invested in gaming firm Nazara Technologies.

Hornbill Capital was founded by Manoj Thakur, a former CEO of Avendus Private Equity Investment.

Dhan chief executive Pravin Jadhav declined to comment, while an email sent to Hornbill Capital did not elicit any response till press time Sunday.

Dhan, which competes with IPO-bound Groww and Zerodha, is expected to finalise the contours of the investment round in the next 30-40 days, after all bids are in place.

This also comes at a time when multiple other fintech deals are underway and the total size of the deals also being increased, people aware of the matter said.

“Yes, they have given a bid for a $200 million round at a $1.5 billion post-money offer. This is a well contested round with multiple bids for a profitable startup despite recent regulatory changes,” one of the sources aware of the matter said. Another person said the offer was at a pre-investment valuation of $1.25 billion.

Dhan, once the round formally closes, could become India’s first unicorn of 2025, with its valuation surging from $125 million. The Mumbai-based firm, founded by former Paytm Money CEO Jadhav in 2021, is among the top five platforms for new trader additions per month and has been profitable, reporting a maiden profit of Rs 155 crore in FY24 on revenue of Rs 380 crore. Jay Prakash Gupta and Alok Pandey are the other cofounders at the firm backed by Mirae Asset VC and 3one4 Capital, alongside several leading internet entrepreneurs and CEOs.

ET had reported that 85% of Dhan’s users were ‘power users’—traders actively using its tools. This has helped the company maintain growth even amid regulatory changes affecting the broader trading business, particularly in F&O.

Market leader Groww is eyeing a potential $6-8 billion valuation in its upcoming IPO, more than double its last valuation.