Reality Check: Is Groww Really Bigger Than Zerodha?

Groww & Zerodha are making headlines today. Most people are claiming that Groww has become an even bigger company than Zerodha. But what is the reality?

Groww is a fintech startup in India where you can open your demat account for free, invest, and trade for free. It is very popular among youth these days, due to its massive advertisements.

It is claimed that Groww has overtaken Zerodha as the leading brokerage in terms of active investors.

According to NSE data, Groww now has 6.63 million active investors, while Zerodha has 6.48 million as of September 2023. This is really surprising because back in March 2021, Zerodha had 3.4 million customers, and Groww had only 0.78 million.

To clarify, an active investor is someone who makes at least one trade in a year. It’s not the only measure of a platform’s popularity, but it shows how quickly Groww has grown.

Zerodha has been the leader since 2019, and it took them almost a decade to get there. But Groww managed to catch up in just three years. They used social media, videos, blogs, and TV ads, especially during cricket matches, to attract customers.

As of FY23, Zerodha had 6.39 million customers, while Groww had 5.37 million. Groww’s growth has been impressive, going from 0.78 million users in FY21 to 5.78 million in FY23.

Other Competitors In Market

One interesting thing is that platforms like Groww and Upstox are gaining popularity as they don’t charge customers for opening accounts or annual maintenance.

Some big competitors like HDFC Bank also joined the race with their Sky discount broking app. Even PhonePe, with its ‘Share.Market’ platform, is entering the investment space.

In India, there are around 12.97 crore demat accounts, but only 3.34 crore people actively trade on the stock exchange at least once a year.

Grooww vs Zerodha: What Is The Reality?

Now it’s time to reveal the truth! See, Groww has indeed outperformed Zerodha in terms of number of users. But the fact is that the majority of the Groww users are novices or beginners.

On the other hand, most of the users of Zerodha are professional investors and traders, who have been active in the market for more than decades.

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Simply when a normal user of Groww invests ₹1,000 and doesn’t repeat it for several months. In contrast, a normal Zerodha user invests around ₹30,000 per month, throughout the year.

Groww has to educate its users and spend crores on advertisements. While Zerodha users are already educated and well-experienced.

Zerodha’s revenue in FY23 was a whopping ₹6,875 crore, which is more than 5 times higher than Groww.

Groww made a revenue of ₹1,294 crore in FY22, which means its net profit was just ₹73 crore. On the other hand, Zerodha reported a 39% growth in revenue and made profits of ₹2,907 crore in FY22.