Even as investor participation is slowing down and rules around derivatives trading are tightening, Dhan has bagged its biggest round yet to enter the unicorn club.

The $120 Mn round, led by Hornbill Capital and joined by Japan’s MUFG, BEENEXT, DMart’s Ramesh Damani, DSP Family Office among others, valued Dhan at around $1.2 Bn (INR 10,000 Cr). At more than 10X its estimated FY25 revenue of around INR 900 Cr, the valuation has put the spotlight around Dhan and its parent entity Raise Financial.

Especially, when its last valuation was around INR 1,000 Cr, nearly 10X lower than its current unicorn valuation. And given the current chill in the investment tech landscape, the new round does raise the question of what exactly is Dhan doing that its bigger rivals aren’t, and where its edge lies.

Dhan cofounder and CEO believes the company’s focus on margin trading has unlocked an avenue that others have shied away from. The startup plans to deploy the raised capital primarily in two areas, doubling down on its margin trading facility (MTF) book and diversifying into complementary businesses targetting its core audience, Gupta told Inc42.

Dhan also plans to launch a standalone platform for long-term investing aimed at younger users. The product will initially offer mutual funds and will expand into other investment products, which will put it in the league of Groww and Zerodha.

Dhan’s Multi-Pronged Strategy

Founded in 2021 by Pravin Jadhav, Alok Pandey, Jay Gupta, Dhan is an online stock trading and investing platform. Dhan’s parent company, Raise Financial Services, operates a suite of tech-driven financial products, including ScanX (a real-time market research and analytics platform), Upsurge (an education platform for investors and traders), Filter Coffee (a media platform offering bite-sized financial content), and Fuzz (an AI model delivering contextual and verified financial insights).

Although the company had been scouting for this round since last year (having reportedly considered players like ChrysCapital), it turned to existing investors such as BEENEXT for its next round, and the CEO believes this is a vindication of Dhan’s strong financial health and growing market share.

A key factor has been the growing MTF penetration in the past two years. Dhan introduced MTF in 2022, allowing traders to invest with up to 4X leverage for trading on their principal amount.

In return, Dhan charges interest on the borrowed funds, ranging from 12.4% to 16.4%, depending on the volume. Dhan’s MTF book reportedly

© Inc42