Pixahive
Cryptocurrency may be the latest craze, but traditional stock markets are the old school way of investing money. And, the pandemic nudged millennials who were on the edge about trading into dipping their toe in the market with stock broking startups. “COVID-19 has awakened a new generation of retail investors who have discovered markets and invested in stock for the first time,” Yani Assia, the CEO of the Israeli social trading platform eToro, told Business Insider.
Players like Zerodha, Groww, Upstox and 5 Paise now corner 39.1% of the market share in active demat accounts — ten times the 3.1% in 2017, according to Credit Suisse report dated May 10.
Zerodha, founded in 2010 by brothers Nithin and Nikhil Kamath, is the largest of them all. It accounts for 19.1% of the market share and it more than doubled its profit in the last financial year to ₹1,000 crore. And, a lot of this was driven by an influx of customers during the pandemic months when the average age of new customers dropped from 32 years old to between 25 and 27 years old.
Zerodha, along with Upstox and Groww, are launching other services like direct mutual fund investing, digital gold investing, international investments, to better monetise their customers. Zerodha is even offering loans against shares.
Others, like Smallcase, are trying to make the process of investing more automated. They let investors pick up a basket or portfolio of stocks that reflect a certain theme in just one click. Those looking to park their money for the long term now don’t need to shortlist shares and configure which combination will get them the best returns.
Some may be skeptical, but nearly 2.5 million customers have already invested in such baskets with a monthly investment average of $150 million, according to Credit Suisse.