Groww revenues up 5X in FY20, Upstox 2X

Online mutual funds seller and stock brokerage Groww’s parent holding Nextbillion Technology reported a 5x increase in its yearly revenue, in the financial year ended March 2020. The company said its total consolidated income rose to about Rs 1 crore in the period, from Rs 20.14 lakh, a year earlier.

Separately, rival Upstox’s parent holding RKSV Securities reported a 2x jump up in its FY20 revenue. The company said its total standalone income rose to about Rs 154.69 crore in the period, from Rs 77.51 crore, a year earlier.

While Nextbillion Technology registered a total loss of Rs 7.92 crore in the reported period, RKSV Securities reported a total loss of Rs 37.99 crore. The former’s losses had widened 34 times year-over-year, and the latter’s losses are comparable to its FY19 profits of Rs 34.58 lakh.

Read: Online trading firm Zerodha rakes in Rs 442.3 cr profits in FY20

Nextbillion spent Rs 8.92 crore on its employee related costs, versus Rs 43 lakh a year ago. The Rs 1 crore figure in revenue was hence pared into forming the total loss. Meanwhile, employee related costs at RKSV Securities stood at Rs 32.4 crore, up 147%.

Apart from employee spends, top cost heads at Nextbillion proved to be in areas of onboarding expenses (Rs 82.39 lakh), and software, server, and licensing costs (Rs 70.34 lakh), in FY20.

Read: Digital investment startup Groww onboards top deck from NSE, SEBI

Groww, which recently became Y Combinator Continuity fund’s first India based investment, launched several new products in 2020. The new investment products on its platform were trading of stocks, initial price offering, intraday trading, exchange traded funds, and digital gold.

Prior to 2020, Groww was primarily a wealth management platform. Its largest chunk of revenues came from mutual fund distribution in FY20, amounting to Rs 27.92 lakh. The company now claims to have crossed 10 million registered users across 900 cities in India, and that it has enabled the opening of over 1 million dematerialized accounts.

The company was founded in 2016 by former Flipkart employees Keshre, Harsh Jain, Neeraj Singh, and Ishan Bansal. Apart from Y Combinator, the startup is backed by Sequoia India, and Ribbit Capital, among others.

On the other hand, RKSV Securities took an aggressive growth centric approach and had made substantial expenses on its infrastructure development, expenses related to marketing and expansion of the consumer base to penetrate its product deep down in the market, as per its FY20 filing.

In the period, it also partnered with MetaLab to redo the Upstox’s UI and UX in web, Android, and iOS. The 2019 partnership is expected to conclude by February 2021, with a re-designed Upstox app rollout by March 2021. 

MetaLab is an interface design firm headquartered in Victoria, British Columbia that provides product design, engineering, and research services. Its clientele also includes the likes of Slack, Google, Uber, and Amazon. 

Apart from employee costs, top cost heads at RKSV Securities proved to be in areas of discounting charges, advertising and promotion, after sales services, and legal costs. Each of the four in the range of Rs 20 crore in FY20, up from single digit crores of rupees.

In June 2020, Upstox had hit 1 million customer accounts. The Mumbai based company last raised $25 million in its second round institutional round from New York-based hedge fund Tiger Global Management in 2019. Founded in 2009 by Ravi Kumar and Shrinivas Viswanath, the fintech firm is also backed by Ratan Tata and venture capitalists Kalaari Capital and GVK Davix.

Read: The rise and rise of digital-first brokerage platforms

Other players in the nascent securities brokerage and stock trading services industry in India include seasoned and new players such as Sharekhan, Sharekhan’s Espresso, Finvasia, and Angel Broking.