Online direct mutual funds investment platform Groww is in talks with Sequoia Capital to raise around $6 million (about Rs 42.5 crore), according to two people in the know of the matter.

The Bengaluru-based startup, which was founded by former Flipkart employees, is planning to raise the funds as part of its series-A round and is on the lookout for more prospective investors, they said. “The fintech space is getting hot and the next big target is entities in the space of retail online investing, where startups like Groww can create a niche for themselves,” said one of the persons, who spoke on condition of anonymity. Queries emailed by ET to Groww and Sequoia Capital did not elicit any response till press time on Thursday. Groww was founded by Harsh Jain, Lalit Keshre, Neeraj Singh and Ishan Bansal, and it started operations in 2017.

It competes with bigger technology companies in the direct mutual fund segment such as Zerodha’s Coin and Paytm Money. The startup allows customers to select funds themselves and invest directly, thereby helping them save on fees charged by indirect platforms.

The company’s aim is to target the next 180 million consumers with investable income and believes that they can be brought within the fold only through platforms that are accessible and easy to use. Y Combinator-backed Groww had raised $1.6 million in a pre-series A round earlier this year from Insignia Ventures Partners, Lightbridge Partners and Kairos, with participation from Mukesh Bansal and Ankit Nagori. ET had reported on November 28 that Sequoia Capital has invested in other fintech firms such as Smallcase and Turtlemint.

The American venture capital firm has been expanding its presence in the fintech segment with these investments and could be dipping into the $695 million fund that it had raised earlier this year.