A decade ago, the investment landscape in India was characterized by cumbersome paperwork, multiple bank visits, long queues, and an application process that could take days. The lack of financial literacy and the prevalence of misselling by agents only compounded the frustration of potential investors. Today, the scenario has changed dramatically. With just a bank account, some disposable income, and a smartphone, anyone can start investing, growing, and managing their wealth. The arrival of platforms like Groww has significantly disrupted the traditional investment industry, making the process simpler and more accessible for millions of Indians.
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
Website: www.groww.com
About Groww and How it Works
Groww is a web-based investment platform that enables users to invest directly in mutual funds and equities. It offers a technology-driven approach to make investing simple, accessible, transparent, and entirely paperless. The platform supports over 5,000 mutual funds and allows users to invest through SIPs and equity-linked savings. With more than 20 million registered users, primarily under the age of 40, Groww has become a go-to platform for young investors who prefer managing their investments via their smartphones.
Groww’s user-friendly interface, transparent pricing structure, and absence of hidden fees have made it a popular choice. The platform does not charge for account opening or monthly maintenance and offers a direct mutual fund plan where users can earn an additional 1.5%. Furthermore, Groww provides educational resources, including e-books, blogs, and stock market updates, to help investors make informed decisions.
Founders and Team
Groww was founded in 2016 by four former Flipkart employees: Lalit Keshre, Harsh Jain, Neeraj Singh, and Ishan Bansal. Their combined expertise in technology and finance has driven Groww’s mission to simplify investing for young people.
Lalit Keshre (Co-founder and CEO): A BTech graduate in Electrical Engineering from IIT Bombay, Keshre managed Product and Engineering at IITiam Systems and later founded Eduflix before joining Flipkart. His experience in product development and management at Flipkart inspired him to co-found Groww.
Harsh Jain (Co-founder and COO): Jain holds a Master of Technology in Information and Communication Technology from IIT Delhi and an MBA in Product Management and Marketing Technology from UCLA Anderson School of Management. His background in technology and product management has been crucial to Groww’s development.
Ishan Bansal (Co-founder): A BTech graduate in Mechanical Engineering from BITS Pilani and an MBA in Finance from XLRI Jamshedpur, Bansal started his career at ICICI Securities and later worked at Naspers Limited and Flipkart. His expertise in finance and corporate development has been instrumental in shaping Groww’s financial strategies.
Neeraj Singh (Co-founder and CTO): With a Bachelor’s in Information Technology from ITM University, Gwalior, and a Post Graduate Diploma in Advanced Computing from C-Dac, Singh’s technical acumen has been pivotal in developing Groww’s technology platform.
Startup Story
The founders of Groww saw a massive opportunity in the investment sector during their time at Flipkart. The e-commerce boom in India had increased average incomes and technology adoption, creating a need for efficient investment platforms. They identified key pain points for users, such as complexity and lack of information, and developed a secure, user-friendly solution. Groww launched as a direct mutual fund distribution platform in 2016 and quickly became one of India’s most popular investment platforms. In 2020, the platform expanded to include equities, followed by digital gold, ETFs, intraday trading, and IPOs.
Mission and Vision
Groww’s mission is to provide the best experience for investors in managing their wealth. Co-founder and CEO Lalit Keshre emphasizes the company’s long-term vision of making investing simple and transparent for millions of Indians. The company’s tagline, “There’s just one right way,” reflects its commitment to simplifying the investment process and providing a wide range of investment options to users.
Products
Groww offers a diverse range of investment products, including:
- Stocks
- Mutual Funds
- Digital Gold
- US Stocks
- ETFs
- Futures and Options
- IPOs
The platform’s straightforward pricing structure and emphasis on user experience have made it a popular choice among young investors.
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. Groww generates revenue through brokerage fees, interest on deposits, and potential future subscription fees for premium offerings and advisory services.
By leveraging technology to reach its target audience, Groww has minimized operating costs. This strategy has helped the platform build a loyal customer base, as users tend to stick with platforms that offer a seamless and cost-effective investing experience.
Revenue and Growth
Groww has experienced rapid growth since its inception. The company’s earnings increased 4.7 times from FY19 to FY20, and its operating revenue grew significantly in FY21 and FY22. In FY23, Groww achieved profitability, recording a net profit of Rs 448.7 crore, a stark contrast to the Rs 239 crore loss in FY22. The company’s revenue surged from Rs 30 crore in FY21 to Rs 1,277.8 crore in FY23, driven by substantial increases in fees and commission income.
Financial Highlights (FY21-FY23):
| Year | Operating Revenue (INR Cr) | Net Profit (INR Cr) | Total Expenses (INR Cr) |
|---|---|---|---|
| FY21 | 30 | – | – |
| FY22 | 351 | -239 | 663.6 |
| FY23 | 1,277.8 | 448.7 | 932.9 |
Funding and Investors
Groww has raised approximately $393 million over seven funding rounds. The most recent round was Series E, where the company raised $251 million in October 2021, led by Iconiq Growth. Other notable investors include Tiger Global Management, Y Combinator Continuity Fund, and Sequoia Capital India.
Funding Rounds:
| Date | Round | Amount | Lead Investors |
|---|---|---|---|
| October 24, 2021 | Series E | $251 million | Iconiq Growth |
| April 7, 2021 | Series D | $83 million | Tiger Global Management |
| September 10, 2020 | Series C | $30 million | Y Combinator Continuity Fund |
| September 18, 2019 | Series B | $21.4 million | Ribbit Capital |
| January 23, 2019 | Series A | $6.2 million | Sequoia Capital India |
| July 9, 2018 | Seed Round | $1.6 million | – |
Acquisitions
Groww has made strategic acquisitions to expand its offerings. In May 2021, Groww acquired Indiabulls AMC for INR 175 crore, marking its entry into the $37 trillion asset management market. In January 2023, Groww acquired a minority stake in SaaS startup Digio.
Challenges Faced
Despite its success, Groww has faced significant challenges. The Indian mutual fund market’s asset base as a percentage of GDP is only 11%, compared to the global average of 62%. Young or first-time investors often perceive investing as complex and risky, deterring them from entering the market. To address these issues, Groww has focused on educating users through interactive content and providing a simple, user-friendly platform.
Future Plans
Groww has ambitious plans for the future. The company intends to launch new products, including deposits, US equities, sovereign gold bonds, and other derivative products. Groww also plans to enter the neobanking and lending spaces, offering credit lines based on users’ transaction histories. The company’s “Ab India Karega Invest” initiative aims to educate investors across tier-II and tier-III cities, further expanding its user base.
Conclusion
Groww has revolutionized the traditional ways of investing in India by leveraging technology to simplify the investment process. With a user-friendly platform, transparent pricing, and a wide range of investment options, Groww has made investing accessible to millions of Indians. The company’s rapid growth, strategic acquisitions, and ambitious future plans position it as a significant player in India’s financial technology sector.
By focusing on financial education and continuously enhancing its product offerings, Groww aims to empower more individuals to take control of their financial futures. As it continues to innovate and expand, Groww is set to remain at the forefront of India’s investment landscape, making investing simpler and more accessible for all.
