Groww: How It Is Changing the Traditional Ways of Investing
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Investing a decade ago entailed a lot of paperwork, many bank visits, long queues, and application processing that used to take days. When you add in a dearth of knowledge about financial products and widespread misselling by agents, the experience becomes nothing short of a nightmare.
These days, all you need is a bank account, some disposable income, and a smartphone to begin investing, increasing, and managing your wealth. Though some of the new investors are starting with mutual funds, equities, and other investment platforms, many of the investment-averse citizens were also noticed to step out from it altogether. However, with the emergence of Groww, the investment industry, it seems, has witnessed a laudable disruption with the easy ways of investing money with stockbroking and direct mutual funds that the platform has encouraged.
Here goes the Success Story of Groww, an organization that has made investing simple for millions of Indians. Know more about the Founder and History, Mission and Vision, Products, Business model, Revenue and Growth, Funding and Investors, Acquisitions, Awards, Competitors of the company, Challenges Faced, and other details ahead!
Groww - Company Highlights
| Startup Name | Groww |
|---|---|
| Owner | Nextbillion Technology |
| Headquarters | Bangalore, Karnataka, India |
| Industry | Financial technology, Investment, Mutual Funds |
| Founders | Lalit Keshre (CEO), Harsh Jain, Neeraj Singh and Ishan Bansal |
| Founded | April 2016 |
| Valuation | $3 billion (As of October 2021) |
| Website | www.groww.com |
About Groww and How it Works?
Groww - Founders and Team
Groww - Startup Story
Groww - Mission and Vision
Groww - Name, Logo and Tagline
Groww - Products
Groww - Business Model
Groww - Revenue and Growth
Groww - Funding and Investors
Groww - Acquisitions
Groww - Advisors and Mentors
Groww - Awards
Groww - Competitors
Groww - Challenges Faced
Groww - Future Plans
About Groww and How it Works?
Groww is a web-based investment platform that allows users to invest in mutual funds and equities directly. The company is a creator of a mutual fund direct access platform. Groww's technology is aimed to make investing simple, accessible, transparent, and fully paperless, allowing customers to invest in mutual funds without any difficulties.
Groww users can invest in mutual funds through SIPs and equity-linked savings. According to the company, it has over 1.5 crore registered users, the majority of them are under the age of 40 and prefer to use their phones. It offers over 5,000 mutual funds that can be invested directly through its website and app, which is available on iOS, and Android.
It features a straightforward pricing structure that includes cheap trading fees. You can invest in a mutual fund for free with no hidden fees. Groww does not charge an account opening fee or a monthly maintenance cost. Moreover, with Groww's direct mutual fund plan, you can also earn an additional 1.5%.
Groww offers E-books, Resources, and Blogs that provide stock market essentials and updates to assist investors in making better decisions. One can open a paperless account immediately very easily. If you want to participate in the primary market, you can submit an online IPO application. A Brokerage Calculator is included in the software.
Anamika Mahapatra
Groww - Founders and Team
Groww, which was founded in 2016 by 4 former Flipkart employees Lalit Keshre, Harsh Jain, Neeraj Singh, and Ishan Bansal, aim to make investment more accessible to young people by simplifying the process. The DIY (Do It Yourself) model, in which individual investors establish and manage their own investment portfolios, is preferred by most millennials.
Lalit Keshre
Lalit Keshre is the Co-founder and CEO of Groww. Keshre was a Btech, Electrical Engineering student in microelectronics from IIT Bombay. He looked after the Product and Engineering of the IITiam Systems. After completing his graduation Lalit founded Eduflix. He eventually joined Flipkart, where he was in the Product department and served for a little less than 3 years before founding Groww in May 2016.
Harsh Jain
Popularly known as the Co-founder and COO of Groww, Harsh Jain was an IIT Delhi student from where he completed his Master of Technology in Information and Communication Technology. Jain also has an MBA in Product Management and Marketing Technology from the UCLA Anderson School of Management.
Ishan Bansal
Ishan Bansal is another Co-founder of the company. Bansal was a student of BITS, Pilani, from where he completed his BTech in Mechanical Engineering. He has been a Charter Holder from the CFA Institute. Bansal also has an MBA degree in Finance from XLRI Jamshedpur. Ishan Bansal started his career in ICICI Securities. He eventually left the company and joined Naspers Limited as a Manager. Flipkart was the next company that he joined where he was in Corporate Development. After his brief stint with Flipkart, Ishan opted to co-found Groww.
Neeraj Singh
Neeraj Singh is known as the Co-founder and CTO of Groww. Neeraj has a Bachelor's in Information Technology from ITM University, Gwalior. He then opted for a Post Graduate Diploma in Advance Computing from C-Dac. Singh initially joined JDA Software as a Software Engineer and then opted for Ivy Computech as his company which he started as a Senior Software Engineer. He eventually joined Flipkart in the SDE department and eventually decided to co-found Groww with the other founders.
Groww - Startup Story
The founders of the company witnessed the change in the e-commerce market during their time at Flipkart and realized that investment is the next big opportunity. The e-commerce boom signaled an increase in average income and technology savvy, and it was at this point that the founders realized that individuals indeed have discretionary cash and will need assistance in putting it to good use.
When the founding team started investigating Indian financial options for interested consumers, they spent a lot of time learning about the market and identifying the users' basic pain concerns. They have to conduct numerous tests to determine the best user experience. Furthermore, the users' hard-earned money was on the line. This is why they needed to deliver a safe and secure solution, which required some time to develop.
Groww began as a direct mutual fund distribution platform in 2016 and has since grown to become one of the country's most popular mutual fund investing platforms. Groww added equities in the early part of 2020 in response to customer demand, and the following year, it launched digital gold, ETFs, intraday trading, and IPOs in rapid succession.
Groww is a Bangalore-based brokerage firm that offers online discount brokerage services for a single charge. Groww can help you invest in stocks, IPOs, and mutual funds directly. Nextbillion Technology Private Limited, a SEBI-registered brokerage, is known as Groww. NSE and BSE both have NTPL as a member.
In India, there are about 200 million people with disposable income, but only about 20 million actively invest. Groww's goal was to provide consumers with the information, resources, and customer engagement they needed to get started with investing as quickly as possible.
Muskaan Kapoor
Groww - Mission and Vision
The company's mission is to give investors the greatest experience possible when it comes to managing their money.
Lalit Keshre, Co-founder and CEO, Groww, said – “Over the last few years, we have made investing in mutual funds and stocks simple and transparent for millions of investors in India. If we look at the opportunity that lies ahead, it still feels like Day 1. We started our journey with small steps writing blogs and making videos to educate people about investing. Our wealth as a nation will keep growing, and our mission is to provide the best experience for investors to manage their wealth. We are happy to partner with investors who believe in our long-term vision."
Groww - Name, Logo and Tagline
The Groww logo consists of a circle of two colors: Green and Blue. The logo depicts an increasing graph.
'There's just one right way,' says the company's tagline. The main goal of the company is to make the investing process as simple as possible for their clients. Investors can choose from a variety of mutual funds, and they can also invest in a variety of schemes with varying market capitalizations.
Groww - Products
The list of the products of Groww include :
- Stocks
- Mutual Funds
- Digital Gold
- US stocks
Groww - How to Select the Best Mutual Funds for Beginners
Groww - Business Model
Groww operates as a commission-free platform, charging flat-fee brokerage on equity and F&O trades, along with regulatory charges like STT, stamp duty, exchange transaction charges, and DP charges. For US stocks, there are no account opening or maintenance fees, but charges apply for forex conversion and exchange fees. Revenue sources include brokerage, interest on deposits, and potential future subscription fees for premium offerings and advisory services.
Groww charges a tiny fee, however, it is paid by the mutual fund firm, not by the client. They profit on the funds they sell, but it's a complicated process.
To begin, there are two types of mutual fund investments: regular and direct. In ordinary mode, a distributor appears, and you must pay the distributor a commission. The commission is calculated in such a way that it compensates you for your investment and profits.
Apps like Groww, on the other hand, give consumers a direct investing opportunity by combining different funds and companies into a single platform, thereby extending a wide range of possibilities.
For a fintech company like Groww, the first thing to keep in mind is to expand the customer base. Groww leverages technology to reach the proper target audience, which lowers its operating costs. People rarely switch between these types of applications. As a result, once the correct customer base has been established, they are likely to stick with you for the long haul.
Groww allows users to invest in mutual funds and equities from anywhere in the world, thanks to its high level of technology. With just a few mouse clicks, you can become an owner of a specific stock or mutual fund.
Groww recently moved its parent entity back to India from the US, resulting in a reduced fair market valuation of under $2 billion.
Alan Joseph
Groww - Revenue and Growth
Groww is one of many that has greatly interested investors. The company's earnings increased by 4.7 times to a little over INR 1 crore in FY20, up from INR 20.14 lakhs in FY19. Operating revenue increased by 3.25 times to INR 52.05 lakhs, with financial assets contributing an additional INR 48.24 lakhs.
The company has further seen an increase in its operational revenues in FY21, which were recorded at INR 30 crores in consolidated operating revenues. The fees and commission income that the company provides brought it around INR 13 crore in revenues, which was followed by income from its tech platform and support charges and other operational revenue, which helped the company gain INR 15 crore and INR 2 crore in revenues. The expenditure of the company also grew parallelly, making the total expenditure of the company climb to INR 155.66 crore. Looking at the company's financials on a unit level reveals that Groww has managed to earn Re 1 of operating revenue by spending INR 2.95 during FY21.
The Y Combinator-backed business has witnessed a respectable increase in earnings, but it still trails companies like Zerodha and Upstox, which have earnings of INR 1,094 crore and INR 148 crore, respectively. Groww made INR 1 crore while ET Money made INR 2.24 crore in total in FY20.
Groww is expanding fast and has also achieved unicorn status in April 2021. The company closed $83 million worth of its Series D funding round led by Tiger Global Management, which helped it turn into a unicorn startup.
Anik Banerjee
The company has enhanced its Broking app by introducing the 'Pay' feature, enabling users to engage in peer-to-peer transactions and make payments to merchants effortlessly by scanning QR codes.
Groww Launched Intraday Trading and ETFs
Groww is hailed as a platform that is trusted by more than 30 million users. It is a customer-first company that brings ease and trust for the users while investing in Mutual funds, FDs, Stocks, Futures and Options, IPOs, and more. Groww had equities, and then launched Intraday Trading and ETFs, expanding their product suite. With the launch of these products that cater to two diverse niches within the investing spectrum, Groww aims to provide a gamut of investment options to millennial investors with varied investment objectives. With intraday trading now enabled on 350+ stocks and select ETFs on Groww, investors can short-sell, place a stop-loss order, and track price movements through candlestick charts, within just a few clicks.
On the other hand, ETFs as an asset class can be explored by users who are inclined towards passive investment instruments. With Groww, investors can check all information related to ETFs such as expense ratio, fund manager details, and scheme objectives, as well as track the live price of the underlying securities on the go.
Groww launched Intraday Trading at a time when stock trading was gaining unprecedented popularity amongst Indians, especially young millennials. CDSL reported that the number of demat accounts with CDSL crossed 25 million only in the previous month, registering a 25% increase as against the pre-lockdown numbers. Moreover, since March 2020, mobile trades have more than tripled, as reported in September 2020, according to BSE’s trading data.
Speaking on the launch, Lalit Keshre, Co-founder and CEO, Groww said, “The launch of intraday trading and ETFs on our platform is in line with our promise to provide our customers with all kinds of investment options on a single platform. We already have all the direct mutual funds and gold available on the platform. In the days to come, we will keep adding more features to provide an all-encompassing investing experience”.
Groww also plans to follow this launch with a series of learning modules aimed at educating its investors about the intricacies of intra-day trading and ETFs. The company launched stock investing on its platform in June 2020 and has recorded more than 4.5 Lakh Demat accounts within a short span, thereby becoming one of the fastest-growing discount brokers in the country. Currently, in invite-only mode, customers would soon be able to invest in US equities on the Groww app as well.
Some other growth insights of the brand can be compiled as:
- Groww brags about having 30+ million registered users
- The platform has nearly $400 million in investment
- Groww is a one-of-a-kind startup that recorded over a 10X jump (from $250-300 million to $3 billion) in valuation in a little over a year in India.
- The nearest rival of Groww is Upstox, which recently raised a new round at around a $3.4 billion valuation
- It is a worthy competitor of Zerodha
- Groww had 6.63 million active clients, approximately 150,000 or 2.3% more than Zerodha at the end of September 2023, breaking the latter's lengthy reign at the top.
Groww will Foray into the Neobanking Segment
The company is currently looking to foray into the new banking space with a new neo-banking platform that it will likely launch soon. According to one of the sources close to Groww, the company believes that being a neo-banking company will further make it holistic for the users, which want to emerge as a one-stop solution for banking and investment.
Groww to Launch its Lending Arm
Groww is also looking to foray into lending and is in final talks for the launch of another vertical to its offerings, which would be lending, as per the reports dated January 14, 2021. The company will offer credit lines to some users after selecting them based on their transaction histories as per the mobile app usage, which Groww has already started to do. This step might prove to be playing a great role in multiplying the revenues of Groww, which aren't that noteworthy so far.
Groww Launched Ab Karega Invest
A growing number of investors from tier-II cities are now taking to investing through online platforms. The company will host conferences in selected Indian cities to make investing simple and accessible. Groww, a leading investment platform, stated that 60% of registered users registered with them hail from tier 2 and tier 3 cities. In light of this, Groww has launched a one-of-a-kind financial education initiative “ Ab India Karega Invest”, to bridge investors’ knowledge gap. As per the initiative, the Groww team will tour 52 select cities in 52 weeks and conduct conferences to explain the nuances of investing. The city meets are focused on creating a knowledge-sharing platform for industry players and aspiring investors as well as fostering local investor communities.
As a pilot campaign, Groww previously held meets in Lucknow, Jaipur, and Patna, and the overwhelming reception led to the extension of the campaign PAN India.
On the occasion of the launch, Lalit Keshre, Co-founder and CEO, of Groww said “The penetration of financial services in India is really low beyond metros. Groww is making investing accessible to millions of people in India with a sharp focus on customer experience. For us, there are no boundaries. This program helps us in multiple ways, but the biggest one is to closely engage with aspiring investors spread across these cities in India”.
Groww Receives SEBI Approval
Groww has announced that the startup has received approval from SEBI for the Groww Nifty Total Market Index Fund. This development follows Groww's strategic move earlier this year when it acquired the mutual fund business of Indiabulls Housing Finance, paving the way for its foray into the mutual fund market. As the competition in India's mutual fund space intensifies, with formidable players like Groww's rival Zerodha and Jio Financial Services poised to enter the sector, the landscape is becoming increasingly dynamic.
Groww Gets RBI Licence to Operate as Online Payments Operator
Groww has successfully secured an online payment aggregator license from the RBI on April 29, 2024. This license permits the financial services firm to conduct e-commerce transactions via its UPI app, Groww Pay. Notably, Groww has been strategically expanding into the credit and payments space over the past two years to cater to both existing traders and new users. RBI's regulation of offline payment aggregators marks a regulatory shift, affecting face-to-face transactions via PoS machines and QR codes.
Groww Financials
| GROWW FY23-FY24 | FY23 | FY24 |
|---|---|---|
| Operating Revenue | INR 1,435 crore | INR 3,145 crore |
| Profit/Loss | INR 458 crore | INR 535 crore |
Groww's revenue from operations surged from INR 1,435 crore in FY23 to INR 3,145 crore in FY24, driven by a substantial increase in fees and commission income. Additionally, the company has remained operationally profitable, with profits of INR 535 crore in FY24 from INR 458 crore in FY23.
Pratiksha Bajikar
Groww - Funding and Investors
Groww has raised around $418 million over 7 funding rounds that the company has seen to date. The company has recently raised around $25 million in its Series E funding round on March 5, 2023.
Here's a glimpse of the funding rounds of Groww:
| Date | Round | Amount | Lead Investors |
|---|---|---|---|
| March 5, 2023 | Series E | $25 million | - |
| October 24, 2021 | Series E | $251 million | Iconiq Growth |
| Apr 7, 2021 | Series D | $83 million | Tiger Global Management |
| Sep 10, 2020 | Series C | $30 million | Y Combinator Continuity Fund |
| Sep 18, 2019 | Series B | $21.4 million | Ribbit Capital |
| Jan 23, 2019 | Series A | $6.2 million | Sequoia Capital India |
| Jul 9, 2018 | Seed Round | $1.6 million | - |
Groww - Acquisitions
To date, Groww has acquired only one other mutual fund business, which is Indiabulls AMC. Groww acquired Indiabulls Mutual Fund for INR 175 crore, which includes cash equivalents of INR 100 crore. Groww will be one of the first fintech firms to join the 37 trillion dollar asset management market as a result of this purchase.
| Acquiree Name | About Acquiree | Date | Amount |
|---|---|---|---|
| Indiabulls AMC | Indiabulls AMC is a mutual fund company provides different types of mutual funds, tax saving investments, SIP investments, SIP calculators. | May 11, 2021 | $22.99M |
Groww acquired a minority stake in the SaaS startup Digio as part of its strategic investment on January 2, 2023.
Groww - Advisors and Mentors
Groww gets Satya Nadella, CEO of the second most valuable company, Google as its investor and advisor. Groww Co-founder and CEO Lalit Keshre is thrilled about this development and has not missed posting it on Linkedin.
Groww gets one of the world’s best CEOs as an investor and advisor.
— Lalit Keshre (@lkeshre) January 8, 2022
Thrilled to have @satyanadella join us in our mission to make financial services accessible in India.
Groww - Awards
Some of the awards that Groww received to date are:
- 2017-18: BSE Star MF award for Karnataka's 2nd best performer in the RFD category.
- 2017-2018: 3rd place in the BSE Star MF Fintech – Highest Transactions competition. 2017-2019
- 2018-19: BSE Star MF Fintech – Highest Transactions 2018-19: 1st position
Nadeesh Kareemdathil
Groww - Competitors
The top competitors of Groww are:
- Upstox
- Angel Broking
- Zerodha
- IIFL
- Finvasia
- SAS Online
- Sharekhan
- Edelweiss
- Karvy Stock Broking.
Comparing Groww to its basic competitors :
- Upstox- They offer nearly identical services and a similar brokerage framework
- 5paisa- They offer the same services as 5paisa, but their cost is different because they offer zero brokerage trading. 5paisa offers superior service and charges a reduced brokerage fee (INR.10 per order flat)
- Flyers- In this situation, the services and pricing structure are the same as those of Zerodha. They do, however, give an API that is completely free.
- Angel Broking offers similar services but with a much bigger profit margin.
Pratiksha Bajikar
Groww - Challenges Faced
The industry has risen at a pace of 12.5% per year over the last ten years, which is more than double the world growth rate. However, India's mutual fund asset base as a percentage of GDP is only 11%, compared to the world average of 62% this year. Individual investor demographic data suggests that 48% of somewhat older millennials (aged 29-37) participate in equities, whereas only 4% of the young generation (aged 22-28) do so.
Due to the perceived complexity and the need to have advisors on hand at all times to navigate the dangers, as well as the dread of the hazards, young or first-time investors are hesitant to enter the market. The challenge, according to the founder, was to not only alleviate these concerns but also to educate them. Here's where digital services like PhonePe, GPay, Paytm, and others have made a huge difference by combining a simple user interface with interactive instructional content.
Groww clearly displays a variety of goods to potential investors, together with the corresponding risk level and historic performance. It also provides consumers with a comprehensive summary of all mutual fund facts, which helps to educate them.
Groww - Future Plans
In the coming months, Groww will launch deposits, US equities, sovereign gold bonds, Futures and options, and other derivative products. Groww has prioritized financial education material since the company's beginning.
“Our philosophy has been to create an internet finance company, based on best user experience, transparency, and simplicity, with the goal of offering every investment product out there for an Indian retail investor. Further, while we cannot advise a customer on what to buy or sell, we can definitely provide them with the right information through our educational initiatives," Keshre, chief executive and co-founder, said in an interview.
The company intends to launch a flurry of financial education projects geared at millennials and develop the financial services sector over the following two years. It signed up roughly 7 million customers between September 2020 and April 2021, with 60% of those in Tier 2 cities and beyond, according to the business, and it aims to keep expanding in Tier 2 and Tier 3 cities in the upcoming years..
FAQs
What does Groww do?
Groww is an online investment platform that allows users to invest in mutual funds and equities directly. The company is a creator of a mutual fund direct access platform.
What is Groww's business model?
Groww operates as a commission-free platform, charging flat-fee brokerage on equity and F&O trades.
Groww started in which year?
Groww was started in 2016 by four former Flipkart employees: Lalit Keshre, Harsh Jain, Ishan Bansal, and Neeraj Singh.
Which companies do Groww compete with?
The top competitors of Groww are Upstox, Zerodha, Upstox, IIFL, Finvasia, Angel Broking, SAS Online, Sharekhan, Edelweiss, and Karvy Stock Broking.
What are the Groww app charges?
Groww offers accounts for mutual fund investments with zero transaction charges, no redemption charges, or any other hidden charges. Furthermore, it also offers free account opening facilities that requires zero maintenance charges.
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