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GREX, an Alternative Investments Platform, that has created capital market like ecosystem for serious investing in startups and unlisted companies, has raised Rupees Four crore in its first round of funding. The funds will be utilised to strengthen GREX’s IT backbone and bring in new financial products and features on its transaction and information sharing platform for unlisted companies.
More than 200 startups across India and over 150 investors have begun their registration on GREX. Over eight companies have completed full data disclosure that is required by GREX as part of its requirements to go ‘Live’. The platform is expected to go live next month with the first company trigging its capital raise.
Manish Kumar, Founder & CEO, GREX says “It’s a joyous moment for GREX as we raised our funds from private investors, exactly mirroring how we envisage the companies on GREX to raise and proved ourselves that it is possible. GREX is first such holistic attempt ever across the globe, to build a seamless transaction platform of its kind. Our intention is to ensure we build a participative ecosystem and bring down the cost of capital for the companies. Many of the companies are losing out almost 40-50% of their equity base in the very first or second rounds of capital raise. This is expensive and prohibitive. On the other hand there is huge affluent class of private investors who simply do not have an access medium to these companies. We are simply integrating the mutual needs in a rule and process based framework that caters to all and it is built on a solid IT backbone.”
Kunal Bajaj, Investor in GREX says "The need for GREX is obvious - entrepreneurs and investors need a more transparent and efficient way to partner with each other. If the future of our country is dependent on great entrepreneurs building great start-ups, then they need an even greater platform to rely on for funding their path. Companies across the ecosystem expect GREX to deliver on the great responsibility they have taken–up and to ensure that what they are attempting to do is built in the most robust fashion.”
Another investor in GREX, Chandru Badrinarayanan, executive director at one of the leading index benchmarking company, commenting on why he invested in GREX, says, “GREX is filling a large critical need gap in the market and has experienced promoters with impeccable integrity, commitment and execution capability”
On the closure of the round Abhijeet Bhandari - Co-founder & Head Market Development says “There is a lot of interest in real growth opportunities which early stage companies provide. We want to ease the transaction and information process behind all such transactions, so that the general belief system can be developed towards a positive and conducive environment wherein more transactions may happen with lesser risks”
“What is interesting is the spectrum of investors that we have. We wanted to raise Capital exactly as the companies on GREX are supposed to do. The success of our own raise has a story in itself. It tells us that the appetite in affluent private investors who understand the risk and may invest if given an option, is a very much there. They never had any real access and GREX is willing to provide all the tools that they would need to evaluate, monitor and transact in such opportunities”, says Surojit Nandy Co-founder of GREX.
Companies seeking to raise funds through GREX should dematerialise their shareholding. GREX has tied up with Depository Services and transfer agents to facilitate the process of dematerialization of unlisted shares and transference (of shares) to investors’ accounts in favour of its companies.
Sanjay Nishank, who is also one of the four Co-founder, says “It has taken us time and effort to understand and map to the requirements of every institutional entity. We also had to do it in a market friendly way otherwise it may not have taken off. Therefore, we also negotiated better rates for the companies at GREX as they would be utilizing the respective services more often than any other Unlisted company.”
"Being a financial institution, we needed to study the startup and the capital markets well in order to build a system and process framework that can successfully apply to the broader Unlisted set of companies. We needed to have a solid KYC process for all entities (investor and companies) and had to ensure we comply with all compliances. We only register companies that have a Sponsor. Sponsors are organisations with deep understanding of startups as well as the capital market. In many ways, the Sponsors are like the Venture Capitalists, only that they do not have to raise any funds now. This in turn ensures there is enough unlocking of time for the entrepreneur. The entrepreneur does not have to run-around 50-60% of his time now.” Kumar said.
GREX already has four Sponsors who have completed their formalities and have in fact-begun tying up with companies in their respective areas of influence.
Once a company is registered on the platform (replete with docketed information about the company, its financials and fundraising objectives) investors can follow the company for some time and decide to invest in the company's offerings whenever the company decides to raise capital. Companies can go in for multiple rounds of fundraising on GREX, and therefore the companies will have to adhere to more detailed norms specified by the GREX Governing Council (GC) at all times. The Governing Council is an independent body to govern the market matters.
GREX already has some very well-known people represented in the GC. Gautam Sinha of MyFirstCheque and a GC member says “GREX is needed to level the playing field by ensuring that raising capital is not a closed club accessed only through personal networks and funding is not restricted to only people with fancy education degrees”.
GREX is a seamlessly integrated exchange-like platform for unlisted companies. Its associated ecosystem of participants brings together private eligible investors and high-growth unlisted companies for information exchange and securities transactions.
For unlisted companies, this brings forth a world of opportunities and possibilities. GREX facilitates a steady flow of need-based access to capital like never before. This means companies can raise multiple rounds of capital, depending on their growth needs. Companies can focus on creating value for their stakeholders.
For this to work well for companies, they will be required to be on the platform and share regular updates with the community within the platform. This information sharing forms the basic bedrock of the information exchange at GREX. GREX will enable many second and third party integrations to ensure this information is translated into independent insights and analysis, thus offering more credibility to unlisted companies.
For investors, it will refresh the experience of the regular capital market as it is now available to them, so they can then discover, enter and manage their investment interests with low ticket size of investment (Rs.5-10 lakh) in exciting unlisted companies with high potential.
For more information please log onto https://grex.in/