Exclusive: Pravega and IIFL invest in GrayQuest’s Series B

Education loans-focused fintech startup GrayQuest is set to raise Rs 53 crore ($6 million) in a Series B round co-led by Pravega Fund and IIFL Fintech Fund.

The board of GrayQuest has passed a resolution to offer and issue 6,228 fully paid up and 1,530 partly paid up Series B preference shares at an issue price of Rs 69,062 each to raise Rs 53.57 crore.

Pravega Ventures and IIFL Fintech Fund each invested Rs 21.50 crore, while the company’s founder, Rishab Sumer Mehta, also participated with shares worth Rs 10.56 crore. The shares allotted to Rishab are partly paid, meaning the remaining amount will be called upon when the board decides.

GrayQuest will utilize the fresh funding to meet financial requirements and support its expansion plan, the firm’s regulatory filings disclosed.

The company has also increased its ESOP pool size by adding 1,204 new options, bringing the total ESOP pool to 5,718 options, as per a separate filing. Entrackr estimates that GrayQuest’s ESOP pool is currently valued at $4.5 million.

The Mumbai-based startup had raised $7 million in its Series A round back in March last year, and $1.2 million worth pre-Series A round in August 2020.

According to the startup data intelligence platform TheKredible, GrayQuest has been valued at around Rs 530 crore ( $64 million) post-allotment. The Series B round appears to be ongoing, and the startup is likely to raise additional funds, which could result in a variation in its valuation.

Following the fresh proceeds, Pravega Ventures will hold 10.94% of the company, while IIFL Fintech Fund will own 4.07%. Its Founder Rishab Sumer Mehta will command a handsome 38.59% stake in the company.

Seven-year-old GrayQuest is an integrated fee collection platform for educational institutions, allowing parents to pay annual education fees in flexible monthly installments with zero interest.

Recently, Grayquest was selected for Co-Lab initiative, which was launched by HDFC Bank in collaboration with Pravega Ventures. For the fiscal year ending in March 2023, the startup reported Rs 8.76 crore in operating revenue with Rs 26.3 crore loss. It has yet to publish FY24 results.

According to data compiled by TheKredible, GrayQuest and its competitors, including Leap, Auxilo, Avanse Financial, Financepeer, Propelld, Mpower Financing, and Eduvanz, have collectively secured approximately $500 million in funding over the past 24 months. In July, Entrackr exclusively reported that Leap is in talks to raise a new round at unicorn valuation.