Ratan Tata-backed online discount brokerage startup Upstox
is looking to tap users in smaller Indian towns apart from millennials who want to invest in the stock market and mutual funds as it looks to catch rival Zerodha.
The company says its plan has already begun paying dividends as it is clocking nearly 200% growth in revenues on a year-on-year basis and has even turned profitable. To do this, it has been innovative by reaching out to customers in regional languages rather than English.
“People used to say that tier-III towns are an untapped market, but we believe that it is under-tapped. We have about 80 partners spread across India who are mavens of their community and help run programmes in vernacular languages to connect potential investors with us,” said Shrini Viswanath, co-founder and chief technology officer (CTO), Upstox
says it is riding on top of Aadhaar’s KYC capabilities to sign up users in smaller towns, while it’s mobile-based solution also runs on slow 2G networks. This focus has helped the firm sign up a larger number of users in tier-III markets than even in tier-II markets, added Viswanath.
In the financial year 2018-19, Upstox is targeting at least a 400% increase in turnover and customers. It’s client base almost trebled from 25,000 last year to 80,000 currently and claims it contributes about 4-5% of the stock exchanges’ daily turnovers.
Having raised $4 million in funding so far and with backing from investors such as Ratan Tata, Kalaari Capital and GVK Davix, the Mumbai-based firm says it will use the capital it has raised to improve support, and make it easier for its non-English speaking users to have their queries answered more easily.
“Our focus is to stick with the customer and talk to them in the language they can understand. We also want to be the brand the choice for millennials,” Viswanath added.
Rival Zerodha, on the other hand, has a user base of 600,000 which grew by over 204% in FY17-18 when compared to the previous fiscal. The company claimed its revenue will surpass Rs 2.2 billion in the current financial year and will rake in a profit of Rs 1.2 billion in the same time.