Groww is everywhere. If you are remotely connected to the world of stocks or investment, it would be impossible for you to spend entire day without hearing about Groww. Coincidentally, it is a great day to write about it. This morning, Groww attained it’s unicorn status (A startup that is valued over $1bn). It is the second Indian fintech platform to achieve this rare feat this week after Kunal Shah’s Cred. Company successfully raised $83mn today at a valuation of north of $1bn.
Groww is a platform that enables it’s users to buy and sell stocks, mutual funds, digital gold etc. It would also help you invest in US stocks. So essentially, it operates as a SEBI registered broker and enables seamless transactions with NSE and BSE on your behalf. The speed at which this company has moved their way to the top is also no less than a magic. Founded in 2016, within 5 years company has posted some tremendous numbers.
Reasons Behind Groww’s Success:
How did this company become one of the fastest growing fintech platforms in India? Here are few reasons that I can think of:
1. Experienced Leadership Team:
Oh and did we talk about the fact that Groww is co founded by our very own Ishan Bansal, Lalit Keshre, Harsh Jain and Neeraj Singh. In case that does not ring a bell, Ishan Bansal is the one who co-founded India’s first e-commerce startup, Flipkart. Harsh and Neeraj were also his counterparts at Flipkart looking after product management and solutions engineering respectively. Lalit Keshre is an AMFI registered Mutual fund advisor.
As you might have noticed by now, they have an entire package up their ally. Thinkers, executers, implementers and someone from the industry itself is a part of the core team. This makes a very strong pitch in front of the investors as well.
2. Market Size:
Okay, catch hold of a chair nearby before I drop this one. In India, only 25mn people invest in stocks and mutual funds as of now. Out of some 1.3bn people, this count amounts to about 2% of the population. The key reason behind not investing in equity and MFs is not the lack of money, but rather the lack of knowledge and access to the investment options. This will change as financial literacy becomes mainstream.
Consider this scenario. You decide to invest Rs. 5000 in a mutual fund every month. However, you can’t do it through your phone. You have to visit a bank with Rs. 5000 cash each month to keep your SIP running. Would you do it? Most people won’t . With fintech and it’s ease of usage coming in, this loophole is being plugged. Therefore, everyone is giving investing a thought now.
When that thought strikes their mind, they find the likes of Groww with open arms.
4. Knowledge Bank:
In order to generate demand, Groww has adopted a brilliant strategy. They try to educate maximum number of customers on various aspects of investing. So they have a top ranking blog, a YouTube Channel and presence on other social media. In a way, if you start searching for answers to any of your finance related query, you are likely to encounter Groww on your way.
As a part of this policy, Groww also covers products in their blog which they aren’t even selling. So even if the question is related to insurance, government schemes, they have your back. For pro investors and stock market traders, there is a dedicated channel where you’d get the top stocks of the day, news etc.
Get ready for some economic bombs. While everyone was adjusting with the pandemic (Lockdown 1.0), governments across the globe decided to print more money and push it in the system in order to revive the economy. How does it help? You put more money in the hands of the people, disincentivize savings by slashing the interest rates, so what do they do? Spend it. And once that begins to happen, production increases, jobs increase. This is overly simplified, but you get the idea.
So once, liquidity improved, people rushed towards equity market and opened demat accounts left right and center. Companies like Groww managed to reap benefits of this situation.
6. Lower Cost:
Investing through offline brokers incurs a higher cost as they usually invest through regular mutual funds. However, when you invest using the likes of Groww, you invest in direct mutual funds. What is the difference? It is the expense ratio. For a regular fund the expense ratio would be in the range of 1.5-2%. However for a direct fund it would be less than 1.5% in the most cases. You must be thinking that what difference could 0.5% make? Here’s an article that will shock you. Long story short, you may end up losing an amount equivalent to your entire invested principal if you don’t care about this.
What do I use for investing in stock markets? Is it Groww? Well, no. This is the ‘G’ post of Blogchatter’s #BlogchatterA2Z challenge. I will reveal the apps I use for investing in subsequent letters. For now, I can say that Groww has a lot to offer.
Are you an investor? Do you use Groww?
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Until next time..