Upstox: Pioneering the Zero Brokerage Model for Investment Empowerment
Upstox: Empowering Investments Beyond Traditional Channels
Investment opportunities have expanded beyond banks and insurance companies, thanks to the rise of stocks and equity trading platforms. In this digital era, stock trading and broking have undergone a transformation, becoming more accessible and convenient. However, the increased accessibility has also led to heightened competition among stockbrokers and traders. Fortunately, fintech companies like Upstox have emerged to simplify securities brokerage and stock trading services.
Based in Mumbai, Maharashtra, Upstox is a leading fintech company that offers a wide range of innovative investment options for both companies and individual users. With its groundbreaking zero brokerage model, Upstox aims to empower traders and end-users like never before.
In a significant milestone, Upstox achieved unicorn status on November 25, 2021, following a successful funding round led by Tiger Global Management. It now stands as India’s 40th unicorn startup of 2021.
Discover more about Upstox’s Company Highlights, Industry, Founders, Name, Tagline, Logo, Startup Story, Partnerships, Business and Revenue Model, Mission and Vision, Funding and Investors, Competitors, Future Plans, and more.
Upstox - Company Highlights
| Startup Name | Upstox |
|---|---|
| Sub-Organization of | RKSV |
| Also Known As | RKSV Securities |
| Headquarters | Mumbai, Maharashtra, India |
| Industry | Financial Services, Fintech, Trading Platform |
| Founders | Raghu Kumar, Ravi Kumar, Kavitha Subramanian and Shrinivas Viswanath |
| Founded | 2009 |
| Current CEO | Ravi Kumar |
| Funding | $54 million (November 2021) |
| Revenues | $48.88 million (Rs 385.64 crore in FY21) |
| Total Valuation | $3.4+ billion (November 2021) |
| Website | upstox.com |
Table of Contents
About Upstox and How it Works?
Upstox – Name, Logo, and Tagline
Upstox – Founders
Upstox – Startup Story
Upstox – Mission and Vision
Upstox – Partnership
Upstox – Business Model
Upstox – Revenue and Growth
Upstox – Funding and Investors
Upstox – Competitors
Upstox – Challenges Faced
Upstox – Future Plans
About Upstox and How it Works?
Upstox is a leading fintech company based in Mumbai, Maharashtra, that offers a range of investment and trading services to both companies and individual users. The platform aims to simplify and democratize investing by providing easy access to financial markets and empowering users with innovative tools and technologies.
Here’s an overview of how Upstox works:
Account Opening: Users can start their investment journey by opening an Upstox account online. The account opening process is simple and requires basic personal and financial information.
KYC Verification: To comply with regulatory requirements, Upstox performs a Know Your Customer (KYC) verification process. Users need to submit relevant documents, such as identity proof and address proof, to complete the verification.
Trading Platforms: Upstox offers intuitive and user-friendly trading platforms to facilitate seamless trading experiences. The platforms are available as a web-based application, mobile app for Android and iOS devices, and a pro version for advanced traders.
Investment Options: Upstox provides access to a wide range of investment options, including equities, derivatives, commodities, currencies, mutual funds, and exchange-traded funds (ETFs). Users can choose their preferred investment instruments based on their financial goals and risk appetite.
Market Data and Analysis: Upstox equips users with real-time market data, charts, technical indicators, and analytical tools to assist in making informed investment decisions. Users can monitor market trends, track stock prices, and analyze historical data to identify potential investment opportunities.
Order Placement: Once users have identified a suitable investment opportunity, they can place buy or sell orders directly through the Upstox platform. The platform supports various order types, including market orders, limit orders, stop-loss orders, and more.
Portfolio Management: Upstox enables users to track and manage their investment portfolios efficiently. Users can view their holdings, check realized and unrealized gains/losses, set price alerts, and generate reports to monitor the performance of their investments.
Education and Support: Upstox provides educational resources, tutorials, and webinars to help users enhance their knowledge of investing and trading. Additionally, customer support is available via phone, email, and live chat to assist users with any queries or issues they may have.
It’s important to note that while Upstox offers zero brokerage on equity delivery trades, there may be brokerage charges applicable for other trading segments. Users should familiarize themselves with the fee structure and terms of service before engaging in any transactions.
Overall, Upstox aims to empower individuals and businesses by making investing accessible, cost-effective, and convenient through its user-centric platform and comprehensive range of services.
The Upstox services are primarily based on:
- Stocks
- IPOs
- Mutual Funds
- Futures and Options
Upstox - Name, Logo, and Tagline
RKSV Securities India Pvt. Ltd., established in 2009 as a proprietary trading business catering to specialized customers, expanded its operations to include retail broking services in early 2012. In May 2016, the company rebranded these services under the name Upstox.
Upstox’s company logo is distinctive and represents its brand identity.
In 2021, Upstox launched its latest campaign with the tagline “Start Karke Dekho.” This campaign encourages individuals to take the first step towards investing and experiencing the benefits firsthand.
Upstox - Founders
Raghu Kumar, Ravi Kumar, Kavitha Subramanian, and Shrinivas Viswanath are the founders of Upstox. They established the company in 2010 and have played integral roles in its growth and success.
Ravi Kumar, a co-founder and member of the Upstox Board of Directors, is responsible for product development and investor relations. With a background in computer science, Ravi previously worked on automated trading techniques in the foreign currency markets. He also gained experience in engineering and business development at Thinkorswim Trading Platform and founded RK Trading Partnership and RKSV.
Raghu Kumar, brother of Ravi Kumar, is a co-founder of both RKSV and Upstox. He has been involved with the company since its inception and played a key role in its development. Raghu, along with Ravi and Shrinivas, founded RKSV, which later became the foundation for Upstox’s retail brokerage platform. In 2012, they opened RKSV to the retail public and rebranded that segment of the company as Upstox.
Shrinivas Vishwanath, another co-founder and member of the Upstox Board of Directors, oversees the technology aspects of Upstox. He has expertise in high-frequency trading and has developed low-latency, scalable systems. Before co-founding Upstox, Shrinivas held managerial positions at Citibank. He is also a co-founder of RKSV.
Kavitha Subramanian joined Upstox as a co-founder in October 2016. She contributes to the company’s growth, strategy, finance, and customer experience. With a strong educational background in electrical engineering and an MBA from the Wharton School, Kavitha brings valuable expertise to Upstox. Her previous experience includes roles at Leapfrog Investments, Actis Investments, McKinsey and Co., and SKS Microfinance.
Raghu Kumar, Ravi Kumar, Kavitha Subramanian, and Shrinivas Vishwanath have collectively played significant roles in shaping Upstox into a leading fintech company in India.
Upstox - Startup Story
Ravi and Raghu Kumar, with their inherent interest in stocks and trading, embarked on a journey that led them to establish RKSV. Their early exposure to trading, including Ravi’s school days’ trading account and Raghu’s involvement during college, made them realize the potential of algorithmic trading. This realization fueled their passion, prompting them to form RKSV upon returning to India.
While continuing their algorithmic trading strategies, the duo harbored a vision of establishing a retail brokerage firm. This vision materialized in 2012 when RKSV successfully entered the retail broking industry, opening its doors to the public. Later, in May 2016, the company underwent rebranding and became known as Upstox.
Since its inception in 2009, Upstox has grown to become one of the top five brokerage houses in India and the second-largest discount broker in terms of active clients. As a 100% online broker, Upstox specializes in various investment avenues, including equity, derivatives, currency, commodities, mutual funds, initial public offerings (IPOs), GSec, and bonds.
Upstox - Mission and Vision
Upstox’s mission is to make financial investing simple, fair, and affordable for all Indian investors. The company firmly believes that the quality of the team directly impacts the quality of the product, and they value hard work, honest effort, and sincerity.
Upstox - Partnership
Upstox, one of India’s largest and fastest-growing digital brokerage businesses, has been announced as the official partner for the 2021 season of the Indian Premier League (IPL), commencing on April 9th. This partnership marks a significant collaboration between Upstox and the Board of Control for Cricket in India (BCCI) for multiple years.
Expressing his excitement about the partnership, Mr. Ravi Kumar, Co-founder & CEO of Upstox, stated, “We are thrilled to partner with BCCI for IPL 2021. Cricket holds a special place in India, not just as a sport but as an integral part of our culture and social life. With a massive following, particularly among millennials, IPL has transformed Indian cricket over the past decade, similar to how Upstox is revolutionizing the financial landscape in India. This inherent connection between the two brands drives our enthusiasm. By blending sports and finance, our aim is to promote financial awareness throughout the country.”
This collaboration is groundbreaking, as it marks the first time in IPL history that a brand from the Stock and Mutual Fund industry will engage directly with the general public to raise awareness about this sector. Upstox intends to leverage the IPL platform to educate and engage with a wider audience, creating awareness about the stock market and mutual fund investments.
Upstox - Business Model
Trading stocks on stock exchanges typically incurs commissions and transaction fees paid to brokers. These charges are usually calculated as a percentage of the transaction value, resulting in additional costs for investors. However, Upstox has disrupted the brokerage industry by adopting a different approach. Instead of following the traditional commission-based model, Upstox charges flat rates, leading to significant cost savings for its users. This innovative pricing strategy has positioned Upstox as a disruptor in the brokerage industry.
Upstox’s commitment to cost savings goes beyond just charging flat rates. The company believes in charging zero commission, whether it’s a fixed price per transaction or a monthly flat fee. By eliminating commission charges, Upstox enables its customers to save more money, enhancing their overall trading experience.
It is important to note that Upstox’s zero brokerage charge does not indicate a lack of profitability for the company. On the contrary, Upstox has implemented a unique business model to support its zero brokerage concept—an online-only company model.
Unlike traditional brokerage firms with numerous offices scattered across the country, Upstox operates from a single central location, the Sunshine Tower in Lower Parel, Mumbai. This streamlined approach significantly reduces operating costs, making Upstox’s operations more efficient and cost-effective. By optimizing its infrastructure, Upstox maintains profitability while delivering competitive pricing to its customers.
Upstox - Revenue and Growth
Upstox Revenue
In the fiscal year 2020, Upstox achieved a significant increase in its annual revenue, growing by 99.6% to approximately Rs 124.9 crore. Data from the National Stock Exchange (NSE) reveals that Upstox holds the second-highest number of active users among all stockbrokers, with over 1.85 million active clients. According to the same data, Upstox generated 80.7% of its revenue from brokerage and associated service fees charged to customers on its platform. Moving to the following fiscal year, the operating revenue witnessed remarkable growth, surpassing 200% to reach Rs 385.64 crore in FY21, compared to Rs 124.9 crore in FY20.
Upstox Expenses
While Upstox experienced significant growth in its share trading platform operated by RKSV Securities, this growth was accompanied by increased expenses. During FY20, the company expanded its operations by a factor of 2.01, resulting in a three-fold increase in yearly spending to over Rs 187 crore.
In FY20, employee benefits expenditures rose by 2.5 times to Rs 32.4 crore, compared to Rs 13.09 crore in FY19. Directors’ salary costs accounted for 25% of these expenses and increased by 3.7 times during the same period. Advertising and promotion spending by Upstox increased by 6.6 times to Rs 47 crore in FY20, compared to Rs 7.1 crore in FY19. Additionally, Upstox signed a two-year sponsorship contract with the Board of Control for Cricket in India to become an official partner of the Indian Premier League, costing the company Rs 45 crore per year. Overall, Upstox’s operating expenses increased by 170% to Rs 497.32 crore in FY21.
Upstox Financials
FY19-FY21 Upstox takes pride in the fact that over 80% of its customer base hails from Tier 2 and Tier 3 cities in India. Shrini Viswanath, Co-founder of Upstox, attributes this growth to the increased penetration of high-speed internet, smartphone usage, and digitalization. Speaking at the Inc42 Fintech Summit 2022, Viswanath highlighted that while over 90% of Upstox’s customers originated from the top seven cities in India in 2010-11, the situation has now reversed. Some key growth highlights of Upstox include having more than 1 crore happy investors and maintaining an app rating of 4.4+. Furthermore, the company has garnered support from renowned investors such as Ratan Tata and Tiger Global.
Upstox - Funding and Investors
Upstox has successfully raised approximately $54 million through three funding rounds. The most recent funding round occurred on November 25, 2021, with a total investment of $25 million led by Tiger Global Management. This funding round played a significant role in Upstox achieving a unicorn valuation, making it the 40th unicorn startup in India for the year 2021. The valuation of Upstox was last recorded at over $3 billion.
Here are the details of Upstox’s funding rounds:
- November 25, 2021: $25 million led by Tiger Global Management.
- September 20, 2019: Venture Round of $25 million led by Tiger Global Management.
- January 1, 2016: Series A funding round of $4 million with no specified lead investors.
Upstox - Competitors
The top 10 competitors in Upstox’s competitive set are –
- Finvasia Securities
- Zerodha
- 5paisa Capital
- TradingBells
- Sharekhan
- Angel Broking
- Beeline Broking
- Karvyvalue
- SAS Online
- HDFC Securities
Upstox - Challenges Faced
Upstox experienced a data breach in April 2021, resulting in the compromise of around 25 lakh clients’ KYC and other data. However, the company assured its clients that their shares and cash were secure, and they have implemented enhanced security measures to prevent future incidents.
Upstox faces several challenges in the market, including:
Intense Competition: The brokerage industry in India is highly competitive, with numerous established players and new entrants vying for market share. Upstox must continuously innovate and differentiate itself to stay ahead.
Regulatory Environment: The financial industry is subject to strict regulations and compliance requirements. Upstox must navigate and comply with these regulations to ensure transparency, security, and customer protection.
Cybersecurity Threats: With the increasing reliance on technology and digital platforms, cybersecurity threats pose a significant risk. Upstox needs to invest in robust cybersecurity measures to protect customer data and maintain trust.
Market Volatility: Fluctuations in the stock market and changing investor sentiments can impact trading volumes and customer activity. Upstox must adapt to market conditions and provide tools and resources to help investors navigate volatility.
Customer Acquisition and Retention: Attracting and retaining customers in a competitive market is a challenge. Upstox needs to continuously improve its products, services, and customer experience to build loyalty and expand its customer base.
Technological Advancements: The financial industry is witnessing rapid technological advancements, such as artificial intelligence, machine learning, and blockchain. Upstox needs to stay abreast of these developments and leverage technology to enhance its offerings and remain competitive.
Investor Education: Many potential investors in India still lack awareness and knowledge about financial markets and investing. Upstox faces the challenge of educating and empowering individuals to participate in the market effectively.
Addressing these challenges requires Upstox to adapt, innovate, and build strong relationships with its customers while maintaining a focus on compliance and security.
Upstox - Future Plans
Upstox has several future plans to drive its growth and expand its services, including:
Enhanced Technology Infrastructure: Upstox aims to further strengthen its technology infrastructure to provide a seamless and efficient trading experience for its customers. This includes investing in robust trading platforms, advanced risk management systems, and high-speed connectivity.
Product and Service Diversification: The company plans to expand its product offerings beyond equities and derivatives to include a wider range of financial instruments, such as mutual funds, bonds, and insurance products. This will provide customers with a comprehensive suite of investment options.
Focus on Customer Education: Upstox recognizes the importance of investor education and aims to provide resources and tools to educate customers about financial markets, trading strategies, and investment opportunities. By empowering customers with knowledge, Upstox aims to enhance their trading experience and encourage informed decision-making.
Expansion into New Geographies: While Upstox is already a prominent player in the Indian market, it has aspirations for geographical expansion. The company may explore opportunities to enter new markets and offer its services to a broader customer base.
Partnerships and Collaborations: Upstox may seek strategic partnerships and collaborations with other fintech companies, financial institutions, and technology providers to enhance its product offerings, access new markets, and leverage synergies.
Technology Innovation: As technology continues to evolve, Upstox aims to stay at the forefront of innovation. This includes exploring advancements in areas like artificial intelligence, machine learning, data analytics, and algorithmic trading to enhance its trading platforms and provide personalized services to customers.
Customer-Centric Approach: Upstox intends to maintain its customer-centric approach by continuously improving its customer service, addressing feedback and concerns, and providing a seamless and user-friendly trading experience.
These future plans reflect Upstox’s commitment to growth, innovation, and customer satisfaction as it strives to strengthen its position as a leading digital brokerage in India.
Upstox - FAQ's
What is Upstox? Upstox is a digital brokerage platform that provides online trading services for equities, derivatives, currencies, commodities, mutual funds, IPOs, GSec, and bonds.
How can I open an account with Upstox? To open an account with Upstox, you can visit their website or download the Upstox app and follow the account opening process. It usually involves providing personal and financial information, completing the Know Your Customer (KYC) process, and submitting required documents.
What are the charges or fees for trading on Upstox? Upstox offers different pricing plans, including a zero brokerage plan for delivery-based equity trades. For other trades, they charge a flat fee per order or a fixed monthly fee, depending on the chosen plan. Detailed information about charges and fees can be found on the Upstox website or by contacting their customer support.
Is Upstox safe and secure? Upstox takes security measures to protect user data and funds. They employ encryption, secure login protocols, and follow industry best practices to ensure the safety of their platform. Additionally, they have implemented enhanced security measures after any reported incidents to strengthen their systems.
What trading platforms are available on Upstox? Upstox provides various trading platforms, including Upstox Pro Web, Upstox Pro Mobile, and Upstox API. These platforms offer features such as real-time market data, advanced charting tools, order placement, and portfolio tracking.
Can I trade on Upstox from my mobile? Yes, Upstox offers a mobile trading app called Upstox Pro Mobile, which is available for iOS and Android devices. The app allows you to trade on-the-go, access market information, place orders, and manage your portfolio from your mobile device.
Does Upstox provide research and analysis tools? Upstox offers a range of research and analysis tools to assist traders and investors. These tools include live market data, stock screeners, technical analysis indicators, historical data, and market news. Users can access these tools on the Upstox trading platforms.
It’s important to note that these FAQs are general and may not cover all the specific queries one may have about Upstox. For more accurate and up-to-date information, it is recommended to visit the Upstox website or contact their customer support directly.
