Online discount stock brokerage firm RKSV Securities raises $4M from Kalaari Capital, GVK Davix and others

Mumbai-based RKSV Securities, an online discount stock brokerage announced on Friday that it had raised $4 million in its Series A round of funding from Kalaari Capital, GVK Davix and others. As a part of the deal Vani Kola and Bala Srinivasa from Kalaari Capital will join RKSV’s board.  

Story so far

Founded in 2012 by the brother-duo of Ravi Kumar and Raghu Kumar, along with Shrinivas Viswanath, RKSV is an online investing and trading platform and the company claims that it accounts for close to Rs 6,000 crore of daily traded turnover across the NSE, BSE, and MCX (Multi Commodity Exchange). A year ago, in an earlier interview with YourStory, RKSV claimed that it had 25,000 customers who were trading on the platform, with a daily traded turnover of Rs 4,000 crores. 

Related read from February 2015: Only 2% of Indians trade in stocks, these ex-hedge fund managers want to change the scene

As a tech-focused company, RKSV had recently launched Upstox, a mobile app that is aimed at simplifying the investing and trading experience for both professional traders and beginners. As an online-only player, RKSV has a business model that allows free trading on equities and a nominal fee of Rs 20 pay-per-order for professional traders. Raghu, co-founder of RKSV, spoke about the recent development,

We are thrilled to be working with a group of investors who share our passion for helping individuals build wealth. Investing can be truly engaging and rewarding, and should not be prohibitively expensive to get started. We aim to make this possible with Upstox, our mobile investing and trading app, and our zero brokerage pricing models. In 2016, we are looking to aggressively launch a full suite of products for Upstox.

Currently consisting of a team of about 100 employees in Mumbai, RKSV aims to expand their team strength gradually based on their growth and hire more employees in engineering, design and product development roles. With their mobile app, RKSV aims to go after the tech savvy millenial population in India. The company believes that mobile is the future and with India rapidly adopting smartphones, it is a big opportunity.

Raghu believes that though smartphones have not been the preferred platform for making investments the scenario will change in the future as smartphones become more powerful and apps become more multifunctional. So far they have also noticed that almost 50 per cent of the users on the platform are first time traders and the interest to invest in stocks is growing in India.

RKSV has so far relied on word of mouth, referral and other organic avenues to market their product and gain traction. Going forward they aim to follow the same mantra and not rely on artificial methods to boost growth. Their long term vision is to get millions of Indians to invest in the stock market with confidence. Commenting on the market opportunity and investment, Vani Kola, MD of Kalaari Capital, said:

We believe consumer participation in the Indian equity markets will expand significantly over the next decade. India’s youth population is likely to see equity markets as a viable alternative to fixed deposits, gold and real estate. RKSV’s mobile first brokerage model is well positioned to benefit from this shift. They have a strong product and a great team. 

Sector overview

Currently it is estimated that only 1.5 per cent of the Indian population actively participate in the capital markets due to difficulties involving high brokerage costs, cumbersome trading software, and poor customer support. Others in this space are platforms like ShareKhan, Zerodha, Trade Smart, some of which also have brick and mortar touch points in addition to an online presence. The market is still in its infancy in India compared to western countries where investing in capital markets is more mainstream. So there is large room for growth.

YourStory take

RKSV aims to stand out by banking on the experience of the founders who are ex-hedge fund managers and have experience across multiple continents. Their other USP is a business model where they earn revenue from traders and do not charge investors with their zero commission model. With their learnings from four years of operations, backing of marquee investors and their willingness and flexibility to go where the consumer is most comfortable -mobile with Upstox - RKSV has interesting times ahead.

Website: www.rksv.in

(Disclaimer: Kalaari Capital is one of the investors in YourStory)