How Did Groww Success Story Disrupt Traditional Investment Methods?

Ten years ago, investing involved tonnes of paperwork, numerous bank visits, lengthy lines, and application processing that used to take days. Lack of understanding of financial products and rampant agent misrepresentation make the experience nothing short of a nightmare.

These days, all you need to start investing, building, and maintaining your wealth is a bank account, some extra cash, and a smartphone. Although some new investors begin with mutual funds, stocks, and other investment platforms, many of the people who are opposed to investing have also been seen to avoid it altogether. With the introduction of Groww, the investment industry appears to have undergone a praiseworthy upheaval, thanks to the platform’s promotion of simple investment options including direct mutual funds and stockbroking.

The success story of Groww, a company that has made investing simple for millions of Indians, is presented below. Learn more about the company’s founder, history, mission, and vision, as well as its products, business model, revenue, growth, funding, investors, acquisitions, honors, competitors, challenges faced, and other specifics, in the sections that follow.

GROWW - FOUNDERS AND TEAM

Lalit Keshre, Harsh Jain, Neeraj Singh, and Ishan Bansal, four former employees of Flipkart who established Groww in 2016, want to make investing more accessible to young people by streamlining the procedure. Most millennials like the DIY (Do It Yourself) approach, in which individual investors create and oversee their own investment portfolios.

ABOUT

GROWW AND HOW IT WORKS?

A web-based investment platform called Groww enables users to make direct investments in mutual funds and stocks. The business developed a platform for mutual fund direct access. With the use of Groww’s technology, customers may easily invest in mutual funds because investment is made simple, transparent, and paperless.

Users of Groww can make mutual fund investments through SIPs and equitylinked savings. Over 20 million people have joined, the majority of whom are under 40 and prefer to use their phones, according to the business. Through its website and app, which is accessible on iOS and Android, it offers over 5,000 mutual funds that may be purchased immediately.

Groww provides investors with critical stock market information and updates through its E-books, Resources, and Blogs in order to help them make better judgements. A paperless account is incredibly simple to open right away. You can file an online IPO application if you want to take part in the primary market. The app includes a broker calculator.

LALIT

Keshre

Lalit Keshre is Groww’s co-founder and CEO. Keshre was a Microelectronics Btech Electrical Engineering student at IIT Bombay. He was responsible for the IITiam Systems’ engineering and product. Lalit started Eduflix after earning his degree. Eventually, he worked for less than three years in the Product division of Flipkart before starting Groww in May 2016.

Harsh Jain

Harsh Jain, better known as the CoFounder and COO of Groww, received his Masters of Technology in Information and Communication Technology from IIT Delhi. Jain also holds an MBA from the UCLA Anderson School of Management in Product Management and Marketing Technology.

Ishan Bansal

Another firm co-founder is Ishan Bansal. Bansal received his BTech in mechanical engineering while a student at BITS, Pilani. He previously held a charter from the CFA Institute. Bansal also holds a Finance MBA from the XLRI in Jamshedpur. Ishan Bansal began working with ICICI Securities in 2006. He subsequently left the business and worked as a Manager for Naspers

Limited. The following business he joined was Flipkart, where he worked in corporate development. Ishan chose to co-found Groww after his brief employment with Flipkart.

Neeraj Singh

The co-founder and CTO of Groww is Neeraj Singh. Neeraj has an information technology bachelor’s degree from ITM University in Gwalior. The Post Graduate Diploma in Advanced Computing from C-Dac was his next choice. Singh began his career as a software engineer with JDA Software before choosing to start his career as a senior software engineer with Ivy Computech. Later, he worked for Flipkart’s SDE division before deciding to co-found Groww with the other founders.

Startup Story

During their time at Flipkart, the company’s founders observed the evolution of the e-commerce industry and came to the conclusion that investing is the next significant business opportunity. The founders concluded that people do have discretionary wealth and will require help using it when the e-commerce boom coincided with an increase in average income and technological sophistication.

The founding team spent a lot of time studying the market and figuring out the users’ fundamental pain points when they started looking at Indian financial possibilities for interested consumers. To establish which user experience is optimal, they must do a number of experiments. Additionally, the users’ arduous earned money was at stake. Because of this, they had to give a secure and safe solution, which took some time to create.

In 2016, Groww launched as a platform for direct mutual fund distribution. Since then, it has developed into one of the most well-liked mutual fund investing platforms in the nation. In response to consumer demand, Groww added equities in the first half of 2020. The following year, it quickly introduced digital gold, ETFs, intraday trading, and IPOs.

Groww is a brokerage company established in Bangalore that provides online discount brokerage services for a flat fee. Groww can assist you with direct stock, IPO, and mutual fund investments. Groww is the trading name of Nextbillion Technology Private Limited, a brokerage with SEBI registration. NTPL is a member of both the NSE and the BSE.

Only roughly 20 million Indians actively invest out of the 200 million people who have disposable cash. Groww aimed to give customers the knowledge, tools, and customer engagement they required to begin investing as soon as feasible.

GROWW - PRODUCTS

The list of the products of Groww include :

• Stocks

• Mutual Funds

• Digital Gold

• US stocks

GROWW - BUSINESS MODEL

Groww levies a small fee, but the mutual fund company—not the client—pays it. They make money off the money they sell, but it’s a laborious process.

The two sorts of mutual fund investments are regular and direct, to start. In regular mode, a distributor will show up, and you will need to give them a commission. Your investment and profits are taken into account when calculating the commission.

In contrast, apps like Groww provide customers with a direct investing possibility by fusing many funds and businesses into a single platform, so expanding their options.

The first consideration for a fintech business like Groww is to increase the customer base. Groww decreases its operating costs by utilising technology to reach the appropriate target group. Rarely do people change between these kinds of programmes. As a result, once the right clientele has been attracted, they are more likely to remain loyal to you over time.

Groww’s advanced technology enables users to invest in mutual funds and stocks from anywhere in the world. You can acquire ownership of a specific stock or mutual fund with a few mouse clicks.

GROWW - REVENUE AND GROWTH

One of many that has captured investors’ attention considerably is Groww. The company’s earnings climbed from INR 20.14 lakhs in FY19 to a little over INR 1 crore in FY20, a 4.7-fold increase. Financial assets added an additional INR 48.24 lakhs to operating revenue, which climbed by 3.25 times to INR 52.05 lakhs.

The company’s operating revenues in FY21, which were registered at INR 52.71 crores in consolidated operating revenues, have also increased. Following income from its tech platform charges and other operational revenue, which helped the company obtain Rs 12.7 crore and INR 5.71 crore in revenues, the company’s brokerage and related services brought it about INR 34.3 crore in sales. The company’s expenses increased concurrently, pushing the total amount spent by the business up to INR 155.66 crore. By investing INR 2.95 during FY21, Groww was able to generate Re 1 in operating revenue, according to the company’s unit-level financials.

Although the Y Combinator-backed company’s earnings have grown respectably, they still lag behind businesses like Zerodha and Upstox, which have earnings of INR 1,094 crore and INR 148 crore, respectively. Groww made INR 1 crore in FY20, compared to ET Money’s overall INR 2.24 crore.

Groww is rapidly growing and, as of April 2021, has attained unicorn status. A $83 million Series D fundraising round headed by Tiger Global Management helped the firm close, and this helped it become a unicorn startup.

Launch Of Etfs And Intraday Trading By Groww

Groww is praised for being a platform that more than 30 million users rely on. It is a customer-focused company that makes investing in mutual funds, FDs, stocks, futures, options, and more simple and trustworthy for customers. Groww had equities when they expanded their product line by including intraday trading and ETFs. Groww seeks to offer a wide range of investment options to millennial investors with a variety of financial objectives with the launch of these products, which cater to two distinct niches within the investing spectrum. Investors can short sell, set up a stop-loss order, and follow price changes using candlestick charts with only a few mouse clicks now that intraday trading is available on Groww for more than 350 equities and a few select ETFs.

On the other side, users who favour passive investment instruments may choose to look into ETFs as an asset class. Investors can use Groww to examine all ETF-related information, including expense ratio, fund management information, scheme objectives, and follow the real-time price of the underlying securities while on the go.

Groww introduced intraday trading at a time when Indians, particularly young millennials, were becoming more and more interested in stock trading. According to CDSL, there were 25 million demat accounts with them as of the previous month, a 25% rise from the pre-lockdown figures. Additionally, according to trading statistics from BSE, mobile trades have more than tripled since March 2020, as reported in September 2020.

The debut of intraday trading and ETFs on our platform is in accordance with our pledge to offer our consumers a variety of investment options on a single platform, according to Lalit Keshre, co-founder and CEO of Groww. All direct mutual funds and gold are already available on the platform. We’ll continue to introduce more features in the coming days to give investors a comprehensive investing experience.

Groww also intends to educate its investors on the nuances of intra-day trading and ETFs after this debut with a number of educational modules. In June 2020, the company opened up stock trading on its platform. Since then, it has registered more than 4.5 Lakh Demat accounts, making it one of the nation’s fastest-growing discount brokers. Customers will soon be able to use the Groww app to invest in US equities as well, which is now available only via invitation.

GROWW - FUTURE PLANS

Groww will introduce deposits, US equities, sovereign gold bonds, futures & options, and other derivative products in the upcoming months. Since the company’s inception, Groww has given financial education content first priority.

“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 cofounder, said in an interview”

Over the next two years, the company plans to roll out a flurry of millennial-focused financial education initiatives and grow the financial services industry. According to the company, it added almost 7 million subscribers between September 2020 and April 2021, with 60% of them in Tier 2 and higher cities, and it plans to keep growing in Tier 2 and Tier 3 cities in the next few years.