Wealthtech and investing in India, explained
By Abha Lohia · Startup Decoded
Wealthtech startups help people buy shares, mutual funds and other investments through an app. They earn brokerage, fees and commission, and answer mainly to SEBI.
What wealthtech means
Wealthtech covers apps and platforms for investing and managing money: stock trading, mutual funds, bonds, gold, US shares and portfolio tools. The big shift in India was the move from phone calls to a broker to a few taps on an app. Zerodha pioneered a low flat fee, and Groww drew in many first-time investors.
In StopDown's data, Groww, Zerodha, Dhan, which offers a platform for US stocks, and Raise Financial Services are well-known names in the area.
The investor base in India has changed quickly. A new generation, often in smaller cities, now opens accounts on phones, and many start with a small monthly amount in a mutual fund through a systematic investment plan, or SIP. A SIP moves a fixed sum from the bank account into a fund every month, which suits people with a regular salary.
How investing works in India
To buy shares, a person needs a demat account (an electronic locker for shares), a trading account and a bank account, all linked. Stock brokers are members of exchanges such as NSE and BSE and are registered with SEBI. Mutual funds are run by asset management companies, and a platform can sell them as a distributor or as a registered investment adviser.
The money in the trade moves through the clearing system, and the shares are held at a depository, such as NSDL or CDSL, in the customer's name. The app does not own the customer's shares.
Other products have joined the list: government and corporate bonds, gold, exchange-traded funds and access to foreign shares through approved routes. Each product has its own rules, taxes and risks. Tax rules on gains change from time to time, so investors should check the current ones with a tax professional.
How wealthtech companies make money
Brokerage is the main income for trading apps, either a flat fee per order or a percentage. Other lines include interest on margin funding, where the customer borrows to trade, fees on account services, subscription plans and pledge charges. Platforms that sell mutual funds earn a commission from the fund house if they sell regular plans, or a fee from the customer if they work as advisers.
Income depends heavily on trading activity. When markets are lively, more people trade and brokers earn more. When markets are quiet or rules limit trading, income falls. That is why many platforms add other products, such as loans against securities, wealth management and tools for advisers.
A recent StopDown headline reported that Groww added 1 lakh active clients in September, a sign that customer growth is still going, though active clients are only part of the picture.
Pricing pressure is strong. When one broker cuts fees, others follow, so wealthtech companies look for income that does not depend on cheap trades. Education content, community features and tools for long-term investors are ways to keep customers when markets turn.
Who regulates it
SEBI regulates stock brokers, mutual funds, research analysts and registered investment advisers. It sets rules on how brokers handle client money, how products are advertised and who may give advice. In 2024 SEBI took steps to cool trading in index futures and options, such as larger contract sizes and fewer weekly expiries, because most retail traders in that segment lost money.
Giving paid advice requires registration as an investment adviser or research analyst. Social media tips from people with no registration have been a regulatory focus. As of October 2026, check SEBI's latest circulars for current rules. This page is not investment advice.
If a platform also gives loans or sells insurance, other regulators apply, such as the RBI or IRDAI.
Finfluencers, meaning people who talk about money on social media, are part of this story. SEBI has asked that anyone giving paid advice or stock recommendations be registered, and has pushed regulated entities not to work with unregistered advisers. Platforms should check who they partner with.
What the customer should watch
Trading is risky, and returns are not guaranteed. The customer should read the charges, understand margin and leverage, and not borrow to speculate. Mutual fund investors should compare costs of direct and regular plans. A broker's low fee does not mean a lower total cost if other charges add up.
Startups should be honest about risk in their marketing. SEBI and the exchanges set rules on risk disclosure and client money safety.
Risks and what to watch
Business risks include dependence on market cycles, rule changes on derivatives, price competition that pushes fees to zero, and technical outages on busy days. A system failure during a market rally damages trust.
Watch SEBI's rules on trading and advice, whether platforms grow beyond brokerage into wealth management, and how profit holds up when markets fall.
For founders, trust is the main asset. An app that is clear about fees, safe with client money and honest about risk is more likely to keep customers through a market fall than one that relies only on offers and low prices.
The breakdown
Business models
| Model | How it makes money | Who uses it |
|---|---|---|
| Discount broking | Low flat brokerage per order plus account fees | Stock trading apps |
| Margin funding | Interest on money lent to traders for buying shares | Brokers |
| Mutual fund distribution | Commission from fund houses on regular plans | Investing platforms |
| Investment advisory | Fee from the client for advice | SEBI-registered advisers |
| Subscription and tools | Monthly fee for charts, data and analytics | Trading and research platforms |
The numbers that matter
- Brokerage per active client per year.
- Active clients as a share of all accounts.
- Trading volume, which swings with markets.
- Margin book and the interest it earns.
- Cost of acquiring a client against the revenue over their life.
Rules and regulators
| Regulator or law | What it means |
|---|---|
| SEBI | Registers brokers, advisers, research analysts and mutual funds, and sets rules on client money, risk disclosure and derivatives. |
| Stock exchanges and depositories | Set trading, margin and settlement rules. |
| RBI and other regulators | Apply if the platform lends or handles payments. |
| Data protection law | The Digital Personal Data Protection Act, 2023 applies to client data. |
Risks
- Falling trading volumes in a weak market.
- Regulatory limits on derivatives or advertising.
- Outages during busy trading periods.
- Retail investor losses leading to tighter rules.
Wealthtech & investing: latest on StopDown
- Groww adds 1 lakh active clients in September 8 October 2026
- SheFin launches investing app for women 7 October 2026
- Zomint raises ₹36 Cr seed from Lightspeed, Prime 7 October 2026
- GoSense.ai launches AI app security platform 6 October 2026
- Groww starts rolling out US stock investing 29 September 2026
- Groww CEO identifies deeptech as India's next growth phase 26 September 2026
- 360 ONE launches fine art market report for collectors 24 September 2026
- Fintech startup Navi reports wider net loss for fiscal year 24 September 2026
Every Wealthtech & investing story →
Most active investors here
- Accel (3 rounds)
- Lightspeed (3 rounds)
- Burman Family Office (2 rounds)
- D. Prasad (2 rounds)
- Eight Roads Ventures (2 rounds)
- Elevation Capital (2 rounds)
- Nitin Agarwal (2 rounds)
- Peak XV Partners (2 rounds)
Rounds StopDown covered in the last 12 months. Activity is not a measure of quality.
Questions people ask
What is a discount broker?
A discount broker charges a low flat fee per order and gives few extras like advice. Zerodha is a well-known example of the model.
Do investing apps hold my shares?
No. Shares are held in your demat account at a depository such as NSDL or CDSL. The broker is the link between you and the exchange.
Who regulates stock brokers in India?
The Securities and Exchange Board of India (SEBI) registers and regulates stock brokers, along with the exchanges where they trade.
How do investing apps earn money?
Mostly brokerage, interest on margin funding, account fees, subscriptions and commissions on products such as mutual funds.
Which Wealthtech & investing startups in India raised money recently?
Zomint (₹36 Cr, Seed); Definedge (₹22 crore, Pre-Series A); Crowwd (₹2.5 crore, angel); Safebox ($1.11 million, seed); Slice ($100 million, late-stage).
Who invests in Wealthtech & investing startups in India?
Among the most active backers in StopDown's coverage over the last year: Accel, Lightspeed, Burman Family Office, D. Prasad, Eight Roads Ventures.
Which Wealthtech & investing companies are in the news?
Recent stories on StopDown cover Groww, SheFin, Zomint, GoSense.ai, 360 ONE, Navi, Grip Invest, InCred Wealth.
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