Hardeep Singh
It’s never been easier to invest. When was the last time you looked into the stock market, or mutual funds for that matter?
Investing a year back meant a lot of paperwork, numerous bank visits, huge lines, and application processing that could take several days. The consequence is nothing short of a nightmare when a lack of understanding of management and accounting is combined with widespread dishonesty by agents.
All you need to start investing, increasing, and managing your wealth is a bank account, some disposable cash, and a smartphone. Many residents have been observed avoiding mutual funds, stocks, and other investment platforms outright. Groww, on the other hand, appears to have generated a beneficial upheaval in the investment industry, owing to the platform’s straightforward methods of investing in stockbroking and direct mutual funds.
Well, gone are the days when people, especially adolescents, rarely invested; today, thanks to platforms like Groww, Zerodha, and Upstocks, investing has become so simple that every second adult is interested in it. Today, we’ll examine Groww’s success and the concept behind creating a digital platform to make investing easier.
Introduction to the company
Groww is a Bangalore-based brokerage firm that facilitates online discount brokerage services for a single charge. Groww can help you invest in direct stocks, IPOs, and mutual funds. Nextbillion Technology Private Limited, a SEBI-registered brokerage, trades as Groww. NTPL is a stock exchange member of both the NSE and the BSE.
It is a web-based investment platform that allows users to invest in mutual funds and equities directly. Groww’s platform seeks to make mutual fund investing simple, accessible, transparent, and paperless for clients, allowing them to invest in mutual funds with ease.
The company created a mutual fund direct access platform, which has received considerable appreciation, particularly among younger generations who have always desired to invest in mutual funds but have been driven off by the heavy paperwork that was previously necessary. Groww does not impose an account signup cost or a monthly maintenance fee. Groww’s direct mutual fund plan also allows you to earn an additional 1.5 percent.
Groww members can engage in mutual funds through SIPs and equity-linked savings. The company claims to have over 20 million registered clients, the majority of whom are under the age of 40 and prefer to use their phones.
Not only that, Groww offers stock market essentials and updates in the form of E-books, Resources, and Blogs to assist investors in making more informed decisions. It is really simple to set up a paperless account with the platform with few steps that are needed for authentification. If you want to engage in the primary market, you can apply for an IPO online with the platform and it is that simple. A Brokerage Calculator is included in the software for users to examine the exact return after few years..
Its website and app, both of which are available for iOS and Android, offer direct investment in over 5,000 mutual funds. It has a simple pricing structure and low trading fees. When you invest in a mutual fund, there are no hidden fees.
Groww began in 2016 as a direct mutual fund distribution platform and has since evolved to become one of the most popular mutual fund investing platforms in the country. In response to customer demand, Groww added equities in early 2020, and the following year launched digital gold, ETFs, intraday trading, and IPOs in rapid succession.
Founders and founding team
In 2016, four Flipkart employees — Lalit Keshre, Harsh Jain, Ishan Bansal, and Neeraj Singh left to create a platform that could make investing easier. Groww was the name given to this company when it first started in 2017.
During their time at Flipkart, the company’s founders observed the rise of the e-commerce market and determined that investment is the next big thing. The e-commerce boom signalled an increase in average income and technological expertise, and it was at this point that the founders realised that people did really have more money and would require assistance in putting it to good use.
When the founding team first started exploring Indian financial options for interested consumers, they spent a large amount of time analysing the market and determining the users’ major pain issues.
At first, the founders of Groww spent a significant amount of time studying the market and discovering the major pain points of the users. They have to undertake a number of studies in order to identify the best user experience. Furthermore, because the user’s money was at stake, they needed to build a safe and secure solution, which took time.
The founders came to the conclusion that investing in financial products in India is extremely complicated and opaque based on their own and their friends’ and acquaintances’ experiences.
Only roughly 20 million people in India have investable income, despite the fact that there are over 200 million people having investable income. Making investing simple is the only way to attract the next 180 million investors. Groww’s mission was to provide customers with the tools, resources, and user experience they needed to get started investing as soon as possible.
Groww began as a direct mutual fund distribution platform in 2017 and within a year had grown to become one of the country’s most popular mutual fund investing platforms.
Groww added stocks in early 2020 in response to user demand, and in the same year launched digital gold, ETFs, intraday trading, and IPOs in rapid succession. Over 1.5 crore people in 900+ cities throughout India rely on Groww for their investment needs.
Funding
In April 2021, Groww raised $83 million in a Series D investment. Sequoia Capital India, Ribbit Capital, YC Continuity, and Propel Venture Partners, among Groww’s current investors, joined Tiger Global Management in leading the funding. In September 2020, Groww raised $30 million in Series C fundraising, led by YC Continuity. Sequoia India, Ribbit Capital, and Propel Ventures were among the existing investors in the round. In September 2019, Groww acquired $21.4 million in Series B funding from Ribbit Capital, a US-based venture capital firm. Sequoia India and Y Combinator, both existing investors, also participated in the round.
In January 2019, Groww raised $6.2 million in a Series A investment round led by Sequoia India. American seed accelerator Y Combinator, Propel Venture Partners, and Kauffman Fellows also participated in the funding round.
Previously, the company secured $1.2 million in Pre-Series A funding from Insignia Venture Partners, America’s Lightbridge Partners, and the Kairos fund. Groww got seed funding in January 2018 from CureFit founders Mukesh Bansal and Ankit Nagori, as well as Y Combinator.
Growth
Groww, a five-year-old startup, is one of many that have grabbed the interest of investors. Earnings climbed by 4.7 times to slightly more than INR 1 crore in FY20, up from INR 20.14 lakhs in FY19.
Financial assets raised operational revenue by INR 48.24 lakhs, increasing it by 3.25 times to INR 52.05 lakhs. Despite growing earnings, the Y Combinator-backed startup still trails firms like Zerodha and Upstox, which have earnings of INR 1,094 crore and INR 148 crore, respectively. In FY20, Groww earned INR 1 crore, whereas ET Money earned INR 2.24 crore. Groww is rapidly expanding, and it will be a unicorn by April 2021. The company achieved unicorn status after raising $83 million in a Series D investment sponsored by Tiger Global Management.
Challenges
Over the last ten years, the industry has grown at a rate of 12.5 percent per year, which is more than double the global growth rate. However, India’s mutual fund asset base accounts for only 11% of GDP this year, compared to 62 percent internationally.
According to individual investor demographic statistics, 48 percent of somewhat older millennials (ages 29-37) invest in stocks, compared to only 4% of the younger group (aged 22-28). Because of perceived complexity and the desire to have advisors on hand at all times to manage the dangers, as well as risk aversion, young or first-time investors are hesitant to enter the market. According to the inventor, the aim was to not only make these issues easier, but also to teach people about them. Digital services like PhonePe, GPay, Paytm, and others have made a huge difference in this area by combining an easy-to-use interface with a secure payment method.
Future prospects of the company
The company’s mission is to provide investors with the finest possible experience when it comes to managing their money. Groww is a safe tool to use, according to several online broker comparison websites.
Any money or investment deposited on our website will not be a fraud or easily hacked, as the platform is governed by SEBI.
In the coming months, Groww aims to launch deposits, US equities, sovereign gold bonds, Futures & Options, and other derivative products for a smooth experience. Groww has prioritised financial education content from its inception. The company intends to launch a spate of financial education projects geared at millennials over the next two years, as well as expand the financial services sector.
