Hi guys, if you are a little bit familiar with the equity market then I am sure you have listened to the name of Groww. It provides you to invest directly in mutual funds and they also not charges you.
Groww has stock trading information and capabilities. Before we start let me tell you today we will talk about Groww Case Study. About their business model and founder.
An online website that now offers brokerage-free equity investments, retail, institutional broking, and mutual fund investments.
Before 2010 these financial market were not developed and was not having tech up to date. The main concern of that time was that the people were not literate that much. People were having the negative reputation of the stock market in their minds.
Nowadays this industry is growing at a very rapid pace but all this revolution was taking place due to the introduction of discount brokers in the industry.
Groww Case Study
In 2016, four Flipkart employees Lalit Keshre, Harsh Jain, Ishan Bansal and Neeraj Singh, quit their jobs to start a venture that could make investing easy. They called this venture Groww and started operations In 2017
Groww is a Bangalore based broking firm offering online flat fee discount brokerage services. Groww helps you to invest in Equity, IPO, and Direct Mutual Funds.
Groww is the brand name for Nextbillion Technology Private Limited who is a SEBI registered stockbroker. NTPL is also a member of NSE and BSE.
Groww initially started as a direct mutual fund investment platform. But in the 2020s Groww expanded its product offering to include Equity trading.
Founders based on their own experience and that of their friends and acquaintances, the founders felt that the process of investing in financial products in India is too complex and opaque. Their main motive was to make it more transparent and clear to investor.
There are close to 200 million people who can invest income in India, while only 20 million actively invest.
If you are working on the way to bring the next 180 million on board is by making investing simple. Groww aimed to provide the necessary information, resources and user experience for people to start investing in the simplest way possible.
Initially, when the founding team was researching Indian financial interested people choices they took a lot of time to understand the market and identify the users’ fundamental pain points.
They also had to do a lot of experiments to figure out the right user experience. Also, because the user’s hard-earned money was at stake, they had to ship a safe and secure product, and that took them some time to build.
In the financial world, you cannot compromise with security. The most dangerous cybercrimes are looting the money of new people coming to this world.
In 2017, Groww started as a direct mutual fund distribution platform and within a year became one of the most popular mutual fund investment platforms in the country.
After that user demand, Groww added stocks in the early half of 2020 and the same year launched digital gold, ETFs, Intraday trading, IPOs in quick succession. Today, more than 1.5 crore users across 900+ cities across India trust Groww for their investment needs.
As we discussed already Lalit Keshre, Harsh Jain, Ishan Bansal and Neeraj Singh are founding members of Groww.
Lalit works as the CEO of Groww. Lalit looks after all the aspects of the business, predominantly the product and customer experience at Groww.
Before starting Groww, Lalit was in a senior product management role at Flipkart, where he launched and led Flipkart Quick and helped launch Flipkart Marketplace.
Lalit also founded an online learning company called Eduflix, and he has also been an early team member at Ittiam Systems. Lalit is an alumnus of IIT Bombay.
Harsh Jain heads Growth and Business at Groww. Before Groww, Harsh was part of the product management team at Flipkart.
Earlier, Harsh had co-founded a story-telling start-up. Harsh holds a B-Tech in Electrical Engineering and a Masters in Information and Communication Engineering from IIT Delhi.
He also studied for his MBA in product management and marketing from UCLA School of Management.
Neeraj heads product development and customer research at Groww. A passionate engineer, solution developer, and coder.
Neeraj was with Flipkart as an engineering manager and has built the Flipkart customer returns and refund system before starting Groww.
Neeraj holds a BE degree in Information Technology from ITM, Gwalior and a PG Diploma in Advanced Computing from CDAC.
Their fourth founding member is Ishan who heads Finance at Groww. Earlier, Ishan worked at Flipkart in the corporate development domain. He has also handled corporate development and M&A at Naspers.
Ishan graduated from BITS Pilani, holds an MBA in Finance from XLRI, Jamshedpur and is a CFA charter holder.
Groww Business Model
If we talk about business model of Groww they also work on small fee but they do not charge from client instead they charge from mutual fund house.
If we talk about their whole business model they get a commission from the funds they sell but that’s also a very intricate process.
First of all, there are two ways to invest in mutual funds – Regular and direct. In regular mode, a distributor comes into the scene where you have to pay a commission to the distributor. The commission is set in such a way that it is compensated for your investment and returns on them.
On the other hand, apps like Groww offers a direct investment opportunity to users wherein it provides multiple funds and stocks on a single platform providing users with more options to choose from.
The first point to keep in mind for a fintech company like Groww is to build the customer base.
To reach the right target audience, Groww uses technology which in turn reduces their operating cost. People generally don’t switch between these kinds of apps. So once the right customer base is created, they are likely to go for a long haul without diverting.
With a good level of technology, one can easily invest in mutual funds and stocks using Groww from anywhere in the world. All it takes is just a few clicks and bingo, you are an owner of a particular stock or mutual fund.
Groww– Revenue and Profit
One such company which has peaked investor interest is four-year-old Groww. The company has recorded a healthy surge in earnings which jumped 4.7X to a little over Rs 1 crore in FY20 from only Rs 20.14 lakhs in FY19.
Operating revenue had grown 3.25X to Rs 52.05 lakhs while it earned another Rs 48.24 lakhs from financial assets.
The Y Combinator-backed startup has seen a decent surge in growth in earnings but currently sits well behind the likes of Zerodha and Upstox with earnings of Rs 1,094 crore and Rs 148 crore respectively. In comparison, Groww earned Rs 1 crore and ET Money collected Rs 2.24 crore in total during FY20.
In this market, competition is very high so groww is trying to differentiate itself from the competition. They have a simple pricing model with low-cost trading charges. You can go with free Mutual Fund investments with no hidden charges.
Groww offers you zero Account opening fees and also do not have maintenance Charges. If you go with a direct MF platform that helps you earn an extra 1.5% returns.
Groww provides you E-books, Resources, and Blogs that provide you with basics and updates on the stock market to help investors make an informed decision.
You can get instant paperless account opening. If you are interested in the primary market then you can also apply online IPO application.
They provide an in-app Brokerage Calculator. Groww also provide you facility to invest online in digital gold and US Stocks.
The main competition ofUpstox is with Zerodha, Upstox, IIFL, Finvasia, Angel Broking, SAS Online, Sharekhan, Edelweiss, and Karvy Stock Broking.
Let’s compare it to basic competition. The thing that makes it different from others.
- Upstox- They are with almost the same services and almost the same brokerage structure.
- 5pasia- They are also with the same services but pricing is different as they are offering zero brokerage trading. 5paisa provide better services and brokerage is also lower (Rs.10 per order flat)
- Flyers- In this case services and pricing structure as the same as Zerodha. But they provide free API.
- Angel Broking- They also provide the same services but the margin offered is way higher.
The broking field is very competitive in India. It is not easy to stand out in throat cutting edge competition.
If groww has to stand out from competition than they cannot compromise on the technology and the process they are following.
As we today studied about India’s top stock broker Groww Case Study- Business Model, Founders, Competition the most fascinating thing we learned about the financial market of India. Now, Groww is filling this void. They are helping people to invest in India.
They are growing very rapidly but the thing with Groww founders took it to the unicorn. Recently they raised a funding and get title of Unicorn startup.