Cryptocurrency may be the latest craze, but traditional stock markets are the old-fashioned way to invest money. And, the pandemic prompted millennials who were about to trade to dip their toes in the market with brokerage startups. “COVID-19 has awakened a new generation of retail investors who have discovered the markets and invested in stocks for the first time,” Yani Assia, CEO of Israel’s social trading platform eToro, told Business Insider.
Players like Zerodha, Groww, Upstox and 5 Paise now occupy a 39.1% market share in active demat accounts – ten times the 3.1% in 2017, according to the Credit Suisse report dated May 10.
Zerodha, founded in 2010 by brothers Nithin and Nikhil Kamath, is the largest of them all. It represents 19.1% of the market share and more than doubled his profit in the last financial year to 1,000 crore. And that was largely due to an influx of customers during the pandemic months, when the average age of new customers rose from 32 to between 25 and 27.
Zerodha, together with Upstox and Groww, are launching other services such as direct investment in mutual funds, investment in digital gold, international investment, to better monetize their clients. Zerodha even offers loans for stocks.
Others, like Smallcase, are trying to automate the investment process. They allow investors to choose a basket or portfolio of stocks that reflect a certain theme with just one click. Those looking to park their money for the long term no longer need to preselect stocks and configure the mix that will give them the best returns.
Some may be skeptical, but nearly 2.5 million customers have already invested in such baskets with an average monthly investment of $ 150 million, according to Credit Suisse.