Grundel plotted to capture and marry Thumbelina and defeat his three other competition for her: Berkeley Beetle (whom he pulls the wings off of to make sure he helped find her), Mr. Mole, and The Fairy Prince Cornelius.
In the climax, Grundel fights Cornelius with a flaming pole. Grundel knocks him out and disarms him, but Cornelius grabs his leg and they both fall through the bottomless pit in Mr. Mole's tunnel.
In the credits, he is seen alive and married to a female toad.
He reprises his role in the Spyro adventure, not aligned to the Villain League or Team Nefarious...at least for the original story. In the redefined version created by Tman or MSM, Grundel is a pawn of the Villain League for the duration of the film until his reformation late into the end credits, being manipulated into going along with their scheme to capture Thumbelina and forcibly extract the true fae element of her heart in exchange for gaining her love through an extra love potion from the High Fairy Godmother.