Groww wants to scale its US trading platform but these are the hurdles

• The company had opened doors to US stock trading in November 2020 but only for web users.
• The company is in talks with banks and other intermediaries to standardize the process of currency conversion on their platforms.
• It competes with other unicorns like Zerodha and Upstox as well as publicly-listed company Angle One

Online investment platform Groww The company had opened doors to US stock trading in November 2020 but only on its web platform. The company has not been able to bring the same feature to its much wider base of users who trade on mobile phone users.

The problem, however, is not on Groww’s end but rather on dependencies that have been created so far.

In a conversation with Business Insider, Groww's co-founder and chief operations officer (COO) Harsh Jain highlighted that there are currently a lot of challenges in bringing the US stock investment ecosystem to India.

First, the process of adding capital to a wallet is a rather long one and takes up to 2-4 days. A retail investor who first has to get in touch with the bank to convert his Indian currency to dollars, later the capital can be added to Groww’s stock trading wallet for foreign stocks.

“The process of funding through the LRS [Liberalised Remittance Scheme] and everything is very painful, we are figuring out if we can solve that problem. If we are able to solve that problem, we are able to scale that offering,” Jain added.

Secondly, the currency conversion rate charged by Banks is severely different. “If you are using SBI Bank versus HDFC Bank versus Kotak Mahindra Bank, for you to fund an account for buying US currency, the process is not standardised and there are different charging rates,” he explained.

The customers have much higher expectations of user experience on the mobile app, Jain added. “Our existing app is by far the smoother than anyone in the country when it comes to trading,investing, mutual funds and SIPs. The problem with US Stocks is not under our control. We have to work with banks and intermediary companies to find the easiest way of doing that, '' he added.

Jain confirmed that the company has been in talks with banks and intermediaries in order to further smoothen the processes. The few agendas on the company’s mind currently are setting a standard currency conversion rate, simpler funding process and more.

The company — founded by four former Flipkart employees Lalit Keshre, Harsh Jain, Ishan Bansal and Neeraj Singh in 2016 — claims to have more than 2 million users on its platform, with nearly 70% of them coming from Tier II and III geographies.

The company has raised nearly $393 million to date from marquee investors like Tiger Global, Y Combinator, Sequoia Capital India, Ribbit Capital and others. It was valued at $1 billion in April 2021. It was valued at $3 billion in October 2021.
It competes with other unicorns like Zerodha and Upstox as well as public listed company AngleOne. UpStox is another platform that offers US Stock trading in India.

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