Acquisition project | Groww

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Groww is a financial services company founded in 2016. They offer services in the investment space - be it investing in Mutual funds, trading delivery or intraday. The application provides a simple yet clean UI for its customers who mostly fall in the 22-35 age group. Since the target audience is at a beginner level yet tech savvy, the platform comes across as an ideal fit versus its competitors who have a "complicated UI" with advanced features.

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Summarizing the customer feedback

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Things people love about Groww:

• User Interface and Overall experience
• Beginner friendly
• Simplistic UI with a lot of options to invest in different assets
• Over 5000 mutual funds to choose from
• Secure and trusting app

Things people dislike:

• High brokerage fees
• Missing advanced options in the charting system
• Limited F&O options
• Technical glitches during peak times
• Poor customer service

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• ads over cable TV
• ads on YouTube
• educational videos over YouTube in the form of shorts and long form videos
• Reels, memes, and static posts on Instagram
• Educational and tractional posts over WhatsApp channels and X
• "Ab India Karega Invest", an in-person campaign across various Indian cities

Some snippets from these campaigns are:

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Cable TV ad snippet

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YouTube shorts

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YouTube long-form educational videos

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WhatsApp channel Instagram

Telegram channel X account

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AIKI in-person and online seminar

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YouTube channels for specific asset classes and in regional languages

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User 1

User 2

User 3

User 4

User 5

User 6

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Total Addressable Market:

For stocks: 17% of all Indian households invest in the Indian stock markets, says NSE CEO =

80 million unique accounts, compare that to 61% market penetration in countries like US

For mutual funds: 15% of the Indian population vs a global average of 74%

To even bring India's penetration from its current market to the global average, there is an addressable market of around 54% (considering some overlap between MF investors and stock traders) of 141.72 cr

which turns out to be 76.41 cr new users

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Servicable Addressable Market:

Since, majority of people investing through apps fall under the 20-40 age bracket, let's look at the census reports:

As per the last census of 2011

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Urban Indian population in the 20-40 age bracket = 50.03 cr which is 35.3% of the total population

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Hencee, the SAM could be considered = 35.3% of 76.41 cr

= 26.97 cr

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Realistic obtainable market:

Groww holds a 23.4% market share in the investment broker space

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Keeping Groww's market share constant - that is around 6.31 cr new accounts!

However, since Groww has seen a 9.5% YoY growth, the actual number can be calculated using the following formula:

New Accounts in Year n=Base New Accounts×(1+Growth Rate)^n−1

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Let's calculate for next 5 years (assuming growth rate constant)

new accounts = 6.3 * (1 + 0.099)^4

= 9.19 cr

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Core Value of Groww = Invest in Equity and Debt in a simple way

📣 Which Channels to choose?

Comparing our current channels:

What seems to be working really well for groww?

1. Organic search
2. Paid ads

Let's dive into organic search, the current metrics and what can be done to scale this even further

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Groww's current traffic analytics look something like this:

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While groww is already doing a fantastic job on generating traffic (since most of its traffic is organic) and over 1000K+ backlinks and a page score of around 85

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Things that can be improved upon or scaled would be:

• To improve the LRDs to page metric which seems to be very low when compared to other sites like investopedia and investor.gov
• There is room to improve upon the PA and DA which is only around 50
• SEO can be improved further to increase traffic

What can be done to further improve these metrics?

• Collaborating with reputable financial content creators to do a series of financial awareness videos or sessions and earning more backlinks
• More digital events like AIKG (Ab India Karega Groww) to further increase digital footprint
• Starting a podcast like finshots or sponsoring existing financial podcasts and garner relationships by inviting reputable people from the industry to do collaborative posts and articles
• Creating a community or a forum where people can discuss all things finance, ask questions and thus generate more content
• The forum could be leveraged to reach out to pre-existing customers and encourage them to fill out testimonials and feedbacks
• Adding articles on financial literacy and instruments like cryptocurrency which are all the buzz
• Get featured on high-quality and reputable newsletters, something like the Ken
• Revisiting older articles to make them more high quality
• Publicize about the already existing newsletter by Groww to garner more traction
• Since Groww already has youtube channel in multilingual languages- they should be pushed to create more content - it will help gain traction from more tier-2 and tier-3 cities which are more active in local languages

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Their current marketing campaign is working well for them as their last ad released 2 months ago already has 60k views.

Let us calculate the CAC/LTV ratio for Groww:

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Their total reported revenue for FY'23 was 1277.8 cr

Their total number of customers crossed 1 cr in May

Thus, their ARPU comes to around ₹1277.8

LTV - ARPU * frequency * retention = 1277.8 INR * 4 * 1.5 = 11712

LTV : CAC = 8

Since it's > 3, we can go ahead with Paid ads

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Now, something we have seen recurring across user calls is how most people using Grow are:

• from tier 1 cities
• in the age bracket of 20-40
• are active on social media and follow several influencers
• have discovered the app through WoM or ads
• use it to save for personal goals such as buying a car or plan their next travel

Our ideal customer spends most of their time on instagram and youtube, and stats show that the percentage of userbase between 20-40 on instagram is 60% and for youtube is 38%

The number of subscribers on their youtube channel are over 22.3 lakh and on their instagram page are around 13.5 lakh

Analysing their current content on instagram:

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The most engagement they have received on their reels is when they collaborated with a reputable entity like Dr. Velumani taking their average likes from around 6-7k to 63.7k - which is 10x of the average engagement or when they made content on real-time events like the market crash on the election result day with around 32k likes, again 5x of the average.

They should follow this strategy which has been working for them by creating sponsored posts or videos with people like Dr. Velumani who have a high value following and the community trusts the entity- Groww will be able to borrow trust from them and increase their userbase.

They could also create sponsored posts with trustworthy influencers using trendy audios like

enter Groww - he is your man in finance, mutual fund, +5, low price

you see what I did there*

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That's the kind of content that flies for instagram, for youtube - let's do another one:

Groww's main competitor Zerodha does that by getting sponsored shorts from people like Ankur Warikoo

This short has around 150k likes and zerodha has leveraged Ankur's following to effectively upsell their app. This can be done by Zerodha too - there are a lot of other "finfluencers" with huge following. Zerodha also gains a lot of trust through founder's brand - WTF podcast by Nikhil Kamath and their varsity learning channel. Groww needs to do something similar, since this is already tried and tested.

They can sponsor educational content by trustworthy youtubers spreading financial awareness or discussing underrated mutual funds (and similar content)

Another ad creative that Groww can do could be showing a single guy in his early-mid twenties whose dad still uses a scooter and wishes he had a car. The son notices this gap and starts an SIP to buy a car. 2 years later - he gifts his father a car, showcasing wisdom by investing at this early age, gaining respect from parents, achieving his goals - thus highlighting the theme - Life me groww karna zaroori hai

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