Future Of Investing: The Upstox Way

In a tell-all interaction, Ravi Kumar, Co-Founder, Upstox speaks with Urvi Shrivastav, editorial lead, BW Disrupt, BW Businessworld. Kumar speaks about the start-up's journey thus far, the fascinating story behind its inception, and the future he has for Upstox. 

How did the idea of Upstox come about? 

RKSV Securities was established in 2009, with an aim to simplify trading and investing in India while also increasing investor participation in the equity market. The brand Upstox was launched in 2016 along with Upstox Pro, the suite of trading products built in-house. The same year we launched an Aadhaar-enabled online account opening service, making the process of trading quicker, completely paperless, and efficient. 

Our goal while rebranding and establishing Upstox was to create a seamless trading experience for our customers. We knew Upstox had to be mobile-first, which would ensure that anybody with a smartphone could participate in the equity markets. When we rebranded ourselves as Upstox, we focused on a customer-first approach. We offered something that was easy to understand and, most importantly, accessible for everyone regardless of their age, experience level or location. With over 4 million customers spread across the country, Upstox is now one of India’s largest digital investment platforms. 

What are the new products the brand is building? 

Upstox has always been at the forefront in offering innovative, disruptive, and cutting-edge technology-driven solutions. Currently, we offer platforms like Upstox Pro Web and Upstox Pro Mobile, which allow customers to trade and invest in stocks, derivatives, commodities, currencies, mutual funds, ETFs and digital gold. 

One of the most popular features is the charting tool, which helps traders share their chart analysis with their peers and social networks in real-time for better engagement. Further, our efficient app ticketing offers enhanced customer experience and service. In 2018, Upstox was the first broker in the industry to launch eDIS (electronic delivery instruction slip), a feature that enabled the selling of stocks in real-time without the need for a physical slip or a power of attorney. 

At Upstox, we aspire to be a one-stop shop for investing solutions. Our total customer base is over 4 million, of which more than 80% are in the age group of 18–36 years, and around 70% are first-time investors. Recently, the market has seen a huge influx of retail investors, your view on the same. How many new accounts have you opened in FY 21? 

When the pandemic hit, many people began to look for alternative sources of income and diversify their investment portfolio beyond traditional financial instruments. This resulted in a significant increase in equity participation, particularly among millennials, led by easy access to information via the internet, various investing tools, higher levels of financial knowledge, and advanced technologies. 

Upstox’s market share has more than doubled from 5% a year ago to 11.3 % at present. In FY21, our customer onboarding surged 3-fold when we added more than 2 million customers. Currently, our total customer base is over 4 million. 

Will this trend continue? 

Retail investors have now experienced the ease and efficiency with which anyone can trade in the equity markets. As a result, we believe that the trend of high customer onboarding is here to stay and that it is more than just a lockdown phenomenon. It is important to note that even after this surge in customer additions, only about 3.7% of India's 1.36 billion population participates in equity markets. This is abysmally low for a country of our size. 

The growth of our own customer base has given us some interesting learnings. Over 80% of our total customer base is from Tier 2 & 3 cities, thanks to greater awareness of the equity markets combined with internet penetration. This gives us reason to believe that customer growth from these regions will persist in the short-to-medium term. Young and digitally savvy millennial customers with a DIY attitude are joining the equity market ecosystem. There is no reason to believe that these emerging trends will abate anytime soon. 

What is contributing to this huge influx of investors? 

As per the BSE data, young investors are driving this surge. BSE has crossed 7 crore users, of which 38% are in the 30–40 age bracket and 24% are in the 20–30 age bracket. 

The numbers above mirror Upstox's own experience of onboarding new investors. Currently, our total customer base is over 4 million, of which more than 80% are in the age group of 18–36 years and over 70% are first-time investors. Around 40% of our total customer base is from states like Maharashtra, Telangana and Andhra Pradesh. More than 80% of our total customer base is from Tier 2 & 3 cities. 

How does Upstox ensure seamless integration of customers? What makes it stand apart from its competitors? 

In a highly competitive market, technology is a key differentiator that has enabled the broking sector to consistently deliver value for investors. Today, everyone is looking for a platform that is simple, intuitive, and easy to use. 

We at Upstox, intend to make equities investing accessible to people even in the remotest corner of India. We've always prioritized offering best-in-class services to our customers, right from account opening to trade execution and beyond. Our constant goal has been to put the customer first and evolve in such a way that we can meet their changing needs at all times. We believe we can address this by providing them with tools that are more simple and easy to use. 

Having cutting-edge technology is inevitable for sustenance. Technology is what sets us apart, and that’s the reason our mobile and desktop platforms are so strong. 

What are your customer-focused initiatives in the last year? 

In recent years, technological interventions have brought a paradigm shift in the way people invest. Adding to this, the pandemic has given a hard push towards digitization. Digital broking firms like Upstox have made investing in the stock market accessible to people across the country. 

In the last year, Upstox has worked hard to raise financial awareness and increase equity participation from the current rate of 3-4%. We also have also taken initiatives on increasing financial inclusion in Tier 2 & Tier 3 markets. We are seeing a shift in activity from metros to Tier 2 & 3 cities, which is a positive sign, as more demat accounts in non-metros reflect deeper equity market penetration. 

Being digital-first is in our DNA, and it really helps us grow and build a rich user experience. We have been growing at a rapid pace, mainly due to our products and a customer-first approach. Today, customers are well aware of how to identify a high-quality service that meets their needs and gives them a seamless experience. 

Our entire technology suite is built in-house with an endeavor to develop a stable and easy-to-use platform that is both fast and accurate. Along with accessibility, we have ensured the safety and security of customers’ data and payment information, which is a core component of our business goal. 

Upstox was a sponsor in IPL in April and has recently Upstox became ICC’s official partner. What are the synergies that you see in these partnerships, are you looking for any more association with other sports organizations as well? 

Upstox is now India’s leading financial investment platform and the synergy with our partners is perfect for us. With the integration of sports and finance, we intend to create financial awareness and spread a culture of investment across the country. 

Our objective is to change the way investing is done in India. We want to make financial investment more appealing, which will encourage more millennials to start investing. Just like our partners cater to a huge young audience across the cricketing world, Upstox serves millennials across India. Our partnerships will play a significant role in empowering our customers by helping them maximize the potential of their investments with our tech-enabled and intuitive platform. 

What are your hiring plans for the year?  

At Upstox, we currently have over 400 employees. Over the last year, we have been hiring rapidly. We believe that a well-planned approach is essential to meet a company's hiring needs, which will lead to growth. 

Upstox plans to hire engineers, product managers, designers, growth and brand marketers, content writers, and compliance and legal specialists. We believe the best way to attract and retain top-notch talent is to provide a healthy organizational culture, learning opportunities for them to grow as professionals, and, most importantly, space for them to create impactful innovations rather than focusing solely on execution.