Laravel - Sendgrid smtp error "550 Unauthenticated senders not allowed"

I am following Sendgrid laravel integration using smtp to send email.

I did as the documentation says, all credentials are same as my sendgrid credentials.

But whenever I try to send email using,

Mail::send('mails.demo', $data, function($message)
        {
            $message->to('test@gmail.com', 'test')->subject('This is a test mail!');
        });

It shows error as

Swift_TransportException in AbstractSmtpTransport.php line 383:
Expected response code 250 but got code "550", with message "550 Unauthenticated senders not allowed
"

I can send email using sendgrid test using Telnet guide, that works perfectly.