Case Studies: The Good, The Bad & The Disruptive
Theory is fine, but real stories are better. We break down the rise of Zerodha, the struggles of Paytm, and the business model of CRED.
Key Lessons
- Zerodha: Proved that you don't need VC money to build a billion-dollar company. (Lesson: Focus on Profit).
- Paytm: A warning that "Growth at all costs" can fail if regulatory compliance is ignored. (Lesson: Respect the Law).
- CRED: A unique experiment in building a high-trust community first, and finding revenue later. (Lesson: Data is Oil).
Case Study 1: Zerodha - The Silent Giant
The Problem: Before 2010, trading stocks was expensive. Brokers like ICICI Direct and HDFC Securities charged 0.5% brokerage. If you bought ₹1 Lakh of shares, you paid ₹500 in fees.
The Solution: Two brothers, Nithin and Nikhil Kamath, started Zerodha with a radical idea: Zero Brokerage for delivery trades.
The Growth Models
Zerodha never took external money. They grew only from their own profits.
Why Zerodha Won?
- No Marketing: Zerodha spent ₹0 on TV ads. They relied on word-of-mouth.
- Technology First: Their app, Kite , was cleaner and faster than bank apps.
- Education: They launched Varsity , a free platform to teach people how to trade. Educated users trade more.
Case Study 2: Paytm - The Rollercoaster
The Rise: Vijay Shekhar Sharma founded Paytm as a recharge platform. The real turning point was Demonetization (2016) . Overnight, cash vanished, and "Paytm Karo" became a national slogan.
The Fall: Paytm tried to do too much. It became a "Super App"—offering movie tickets, flights, gold, mutual funds, e-commerce, and cloud services.
The Regulatory Hammer
In 2024, the
RBI
banned Paytm Payments Bank from accepting new deposits due to repeated non-compliance with KYC norms.
Lesson:
In Finance, Trust and Regulation are more important than Technology. You cannot "Move fast and break things" when handling people's money.
Case Study 3: CRED - The Exclusive Club
Founded by Kunal Shah, CRED is perhaps the most debated startup. It is an app exclusively for people with a Credit Score > 750 .
The Model:
1. Offer a platform to pay credit card bills easily.
2. Give "Coins" (rewards) to engage users.
3.
The Real Game:
Data. CRED knows exactly what the top 1% of wealthy Indians spend their money on. They can sell premium loans and products to this group.
The Critique: Is it a business or just a feature? CRED burns massive cash on ads (like the Rahul Dravid ad) but revenue is still catching up.
The FinKinetic Verdict
Startups changed the game.
But as an investor or user, don't get blinded by valuation.
Use Zerodha for low costs.
Use UPI (Paytm/PhonePe) for convenience.
But keep your Emergency Fund in a safe, boring Bank.
Frequently Asked Questions
Is my money safe in apps like Paytm? ▼
Yes, the money in your UPI linked bank account is safe. The money in the Wallet is also safe and regulated by RBI. However, regulatory bans can disrupt services, so it's wise not to keep large amounts in Wallets.
Why is Zerodha safer? ▼
Zerodha is a broker. When you buy shares, they are stored with CDSL (Central Depository Services Ltd), a government-backed depository. Even if Zerodha shuts down tomorrow, your shares are safe with CDSL.