How Groww Transformed Into A Leading Investment App In Just 7 Years – Discover The Strategy Behind Its Rapid Rise!

Groww, is a investment platform founded by four Flipkart employees in 2016, is now the most significant Fintech enterprise worth $3 billion as of 25^th October 2021. The revenue of Groww jumped to ₹2,900 crore in FY24 from ₹1,295 in FY23, with its net profit increasing four times to ₹298 crore in FY24 from ₹73 crore in FY23. Read about what went right for the company and how it can become a Fintech giant in the next ten years!

Groww – The Indian Fintech Giant

As previously mentioned, Groww is an Indian Fintech company based in Bengaluru. It was founded by four employees of Flipkart: Lalit Keshre, Neeraj Singh, Harsh Jain, and Ishan Bansal. The company’s active investor base surpassed one crore in May 2024, with more investors identifying the platform for its immense potential, value and efficiency in stock broking and investment facilities. Groww was initially recognised for running a direct mutual fund distribution platform, which grew rapidly, making it one of India’s leading mutual fund investment channels in 1 year.

Now, the question remains unanswered is how a company that started operating in 2016 became the largest Fintech giant in India in 2024. Well, let’s find out!

Factors contributing to the success of Groww in the Indian landscape

Digitalisation – The Fundamental Catalyst

Digitalisation is undoubtedly one of the critical determinants of Groww’s success in India. Digitalisation influenced the growth of many Fintech companies in India, not only Groww, as it opened a few possibilities for businesses to connect directly with their consumers and understand the type of services or products they want or demand more intricately. Digitalisation has played a vital role in transforming India’s investing scenario, changing the entire population’s mindset regarding online purchasing and investing via Fintech platforms.

Unlike traditional investing, digital investing has become a trend that investors follow regardless of age, gender, or income status. This has allowed Groww to cater to the needs of a larger audience that needs specific, secure, and simplistic platforms, enabling them to invest and grow their money occasionally.

Economic Growth Fuelling Spending Power of Indian Investors

India’s rapid economic growth is also one of the contributing factors that have enabled Fintech companies like Groww to gain traction and build a loyal and responsive consumer base. You see, India’s GNDI (Gross National Disposable Income) grew by 14.5% in 2022-2023 compared to the previous year, which was further expected to grow at an estimated 8.9% in 2023-2024. In reality, the growth was almost 8%, making disposable income in 2023-2024 reach ₹2.14 lakh. Moreover, India’s GDP reached the mark of 3.41 lakh crore USD in 2022, making it the fastest-growing economy, growing at a scale of 8.2% as of FY23/24.

Now, one must ask the reasons for India’s rapid growth, where the top 3 reasons would be large-scale infrastructural investments, real-estate investments, and rising manufacturing outputs. This shows that Indians have started earning more than ever before, with more youngsters being a part of the investment bracket and more people thinking of ways to save and make their money grow. This is where user-friendly platforms like Groww have gained momentum, where their secure and extensive services allowed people all across the nation to take part in active investing to invest more, considering how the economy is also growing at the same time.

However, the problem is that other Fintech platforms like ZeroDha and Angel One grew alongside them. The growth of these platforms has made the Indian Fintech sector more competitive than ever, with more consumers shifting platforms, with the hope of getting more information on how stock broking and what fundamental and technical analyses are required. Hence, Groww, despite its rapid growth record, faced many challenges that affected its growth rate and made it a platform currently used by fewer investors as of 2024 compared to 2022-2023.                                                  

A Few Important Points to Consider

Is Groww profitable, or is it still burning cash for user acquisition?

Yes, Groww is highly profitable investment platform, considering most of its profits are driven by trades in futures and options. Besides that, Groww also capitalizes on new-to-market investors as they believe such consumers are their prime target audiences. However, it is a fact that the company, over the years, have invested good money to acquire new users, which has also made them develop a vast consumer base which is widely responsive to the services it provides and the products it comes up with.

Nonetheless, it is a fact that Groww is indeed burning a lot of cash in the process, which might affect the way they operate in the Indian market, which is highly competitive and provides limited scope for emerging companies to grow in a short span. 

How do platforms like ZeroDha and Angel One affect Groww’s growth and scalability?

Groww’s fast-paced growth might cause serious competition from emerging giants such as ZeroDha and Angel One. Both of these companies have millions of users, making the scalability of Groww against such competitors a bit challenging. However, in the past, the company has shown its competence in staying ahead of these competitors by simultaneously ensuring that its platform is being used by more and more people and emerging investors. Groww’s ability to attract and retain investors, mainly traders, has significantly provided them with a user-friendly, responsive, and quick management interface.  

How will Groww support Tier 2 and Tier 3 cities with low investment penetration?

Groww tends to have a unique plan to support investors in Tier 2 and Tier 3 cities where people show limited interest in investment via digital platforms. Groww primarily intends to provide educational services to people seeking to invest and know the fundamentals of stocks before investment. A well-thought-out approach has been undertaken by Groww as a company with its product F&O SafeGuard, which aims to save investors and traders from huge and frequent losses. The safeguard will potentially ask its users, mainly Intraday and F&O traders, to provide proof of income. Another service Groww intends to bring forth is the tracking feature, through which an investor can aggregate all his investments, possible returns and other associated expenses. 

Groww has also partnered with celebrities like Amitabh Bachchan and Virat Kohli to influence its audience to trust their website and use it for investing purposes. The effect of such collaborations has been mostly positive, making Groww one of the most profitable companies, emerging into the Indian Fintech market like a pro. Such efforts have also enhanced the overall brand presence of Groww and its ability to build a strong brand reputation, which every investor in this day and age looks forward to.

However, there are controversies based on Groww’s decision to endorse celebrities, as influential people’s promotion of financial products such as mutual funds and stock investments is unethical. They can influence anyone to move to regular investing, which is not recommended as investing depends on a lot of factors, starting from education on stocks and proper guidance. 

How do existing regulations and government policies affect Groww’s growth? How does it change consumer attitudes towards investing?      

Now, Groww must maintain the trust of its consumers by ensuring that its platform remains clear of fraud and possible cybersecurity threats. It is essential as the company operates in a highly volatile market where consumers who are not satisfied shift entirely to a new service provider who is capable of delivering trustworthy services in the long run. The company has faced a series of fraud allegations related to incorrect investments, incorrect instalments and so on. However, the company has denied such allegations by effectively paying back any misplaced investments on time.   

What role did Groww’s internal team play in facilitating the growth and scalability of the company in India?

Groww tends to have a few essential departments comprising intellectual and experienced people and past investors with successful investing portfolios. With the help of its interim team, the company, in the year 2021, raised series E funding worth $251 million at a valuation of $3 billion. The funding has enabled Groww to incorporate large-scale technologies and build a strong platform interface that is interactive and visually appealing. 

Verdict  

Groww, being what it is today, stands unfazed and unshaken by competitors who threaten their growth and stability. As the Indian economy grows, Groww’s responsibility to maintain its competitive advantage grows with it. This is because emerging Fintech platforms threaten its profitability, which might disrupt its scalability and effectiveness in holding the largest share of retail investors.

FAQ

Follow us on