Groww vs Zerodha: Revenue, Funding and What’s New?

Regarding trading and investment, there are currently two major brokers in the Indian fintech market: Groww and Zerodha. These investment platforms have been pulling in new users at breakneck speed. In May 2024, Groww added more than 400k active users and Zerodha 100k. With this, Groww’s active user base has crossed 10 million, and it became the country’s first discount broker to achieve this milestone.

When it comes to the top two discount brokers available in India, the active user base is not the only distinction. The two platforms also differ in terms of their fee structure, brokerage, range of investment options, and customer service quality. In this article, we will look at the differences between Groww and Zerodha.

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Groww vs. Zerodha: Key Features Comparison

Feature	Zerodha	Groww
Number of Active Customers	75 lakh	1.02 crore
Broker Type	Discount Broker	Discount Broker
Supported Exchanges	NSE, BSE, MCX	NSE, BSE
Trading Platforms	Kite (Web, Mobile)	Groww App (Web, Mobile)
Brokerage Charges	Max Rs 20 per trade	Max Rs 20 per trade
Equity Delivery	Free	Free
Equity Intraday	0.03% or Rs 20	0.05% or Rs 20
Futures & Options	Rs 20	Rs 20
Account Opening Charges	Rs 200-300	Free
Demat AMC	Rs 300 PA	Free
Margin Trading Funding	No	Yes
Algo Trading	Yes	No
NRI Trading	Yes	No
Customer Reviews	3.9/5	4.3/5

• Account opening and maintenance
  • Zerodha: Charges INR 200–300 for account opening and INR 300 annually for Demat AMC.
  • Groww: Free account opening and no annual maintenance charges for the Demat account.
• Trading Platforms
  • Zerodha: Operates on the Kite platform, which includes a web interface and mobile app.
  • Groww: Provides a comprehensive app for both web and mobile trading but lacks a desktop terminal.
• Order Types and Advanced Features
  • Zerodha: Offers cover orders, after-market orders (AMO), and Good Till Canceled (GTC) orders.
  • Groww: Does not offer cover orders, AMO orders, or GTC orders.
• Customer Support
  • Zerodha: Provides phone and email support but lacks 24/7 service and live chat.
  • Groww: Offers phone, email, and online live chat support.
• Investment Offerings
  • Zerodha: Includes equity, F&O, currency, commodities, mutual funds, and bonds.
  • Groww: Excludes commodities and currency trading but offers mutual funds and bonds.
• Transaction Charges
  • Zerodha: Charges Rs 8 + Rs 5.50 CDSL charges per ISIN transaction.
  • Groww: Also charges Rs 8 + Rs 5.50 CDSL charges per ISIN transaction.

Revenue Models

Zerodha’s Revenue Model

Zerodha, which was started in 2010 by Nithin Kamath, works on a discount brokerage model. It charges a static fee of Rs. 20 or 0.03% (whichever is lower) per trade across segments such as equity, F&O, commodity, and currency trading. Free are equity delivery trades, a pricing strategy that has greatly shaken up typical brokerage systems. Zerodha’s revenue comes from:

• Fees from Brokerage: Although Zerodha does not charge for equity delivery trades, it earns considerable income from intraday and F&O trades.
• Interest for Margin Funding: It gives margin funding to traders who borrow money, and they pay interest on this amount.
• Subscription Fees: Zerodha has premium products such as Zerodha Varsity and Smallcase, which can bring in extra money.
• AMC for Demat Accounts: It earns a yearly maintenance cost of Rs. 300 from Demat accounts.

Groww

Groww, established in 2016 by ex-Flipkart workers Lalit Keshre, Harsh Jain, Neeraj Singh, and Ishan Bansal, also uses the discount brokerage method. It charges Rs. 20 or 0.05% (whichever is less) per order on intraday deals, and there are no charges for equity delivery. Groww’s revenue sources include:

• Brokerage Fees: Similar to Zerodha, Groww earns from intraday trading and F&O segments.
• Mutual Fund Commissions: It does not take commissions from direct mutual funds but does from regular mutual funds.
• Interest on Margin Funding: Groww charges interest on margin funding to traders.
• Other Financial Products: The platform receives revenue from other finance-related products like fixed deposits and gold investments.

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Funding Histories

Zerodha

Zerodha has not received any external funding and still uses only its own resources. This method has given Zerodha complete control over all their operations and important choices. The platform has put significant emphasis on constructing a solid and money-making business model.

Groww

On the contrary, Groww has chosen a more usual path and gathered notable venture capital to support its expansion. The company has completed multiple funding rounds, bringing in big-name investors. Important funding rounds include:

1. Seed Funding (2018): In this round, Groww gathered $1.6 million from Insignia Ventures Partners, Lightbridge Partners, and others.
2. Series A (2019): The company raised $6.2 million, led by Sequoia India.
3. Series B (2020): Ribbit Capital, Sequoia India, and more provided $30 million to Groww.
4. Series C (2021): Groww collected $83 million, a number that pushed its valuation past $1 billion and made it a unicorn.
5. Series D (2021): Iconiq Growth led a further $251 million raise, bringing the valuation to $3 billion.

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What’s New?

Zerodha

• Investment in Education: Zerodha has put a lot of money into investor education with initiatives like Zerodha Varsity, an all-inclusive learning program on stock markets.
• Technological Advancements: Regular enhancements in the Kite trading platform ensure an uninterrupted trading encounter.
• Regulations: Zerodha is strongly committed to following all regulations set by SEBI. They often update their systems to match the newest guidelines from SEBI.

Groww

• New Investment Avenues: Groww is now offering access to US stocks, fixed deposits, and digital gold.
• Better User Experience: They strive to improve their user interface and mobile app, making them more understandable and easy to use.
• Educational Initiatives: Creating Groww Academy, which will offer educational materials and tools to assist users in making thoughtful investment choices.
• Regulatory Compliance: Improving its compliance framework to follow SEBI rules, guaranteeing a secure trading atmosphere.

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Market Position and Customer Base

Zerodha

Zerodha is one of the top players in the market, boasting more than 7.5 million active clients. Because its platform is easy to use, it offers competitive prices, and it emphasizes education as well. The company has been self-financed but still managed to constantly expand its offerings.

Groww

Groww has a bigger active customer base, with more than 10 million users. Its appeal to younger investors and beginners, along with a simple platform to use, has helped it grow exponentially.  The focus on customer needs and strong marketing efforts have given Groww a good standing in the market

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Customer Service Comparison

Zerodha

Zerodha provides customer service over the phone and through email but does not have 24/7 availability or live chat options. The company has different branches, which are useful for in-person assistance. Zerodha’s attention to educational content aids in self-service support too, as it enables customers to find answers on their own.

Groww

Groww’s customer service can be accessed by email, phone, or an online chat feature. Even though it does not have physical branches like traditional investment firms, the strong digital support channels of Groww make up for this. The focus on a platform that is easy to use also helps reduce how often assistance is needed.

The Bottom Line

Both Zerodha and Groww offer users an array of features and benefits, making it a tough decision when deciding which platform to choose. Ultimately, the decision to choose between the two depends on the needs and preferences of the user.