PC: Business Today

In an unexpected move within the Indian fintech space, two of the leading investment platforms Groww and Zerodha witnessed a drop in the number of their users for February 2025. At the same time, PhonePe, a key player in the digital payment segment, has seen a sharp rise in number of user registrations. This trend is due to changing preferences for users, as well as changing competitive dynamics in the fintech market.

Groww and Zerodha are Declining User Base

As per last reported, active user numbers for both Groww and Zerodha slowed down in February 2025. And Zerodha has taken a hit of about 5 per cent in its unique user base, which is known to offer discount brokerage services. This decline can be extrapolated to be due to many factors, one of them being increased competition in the online trading space and an increasing change in investor sentiment.

Similarly, the mutual fund investment platform of the fintech giant, Groww also lost its user base, indicating a not so great a month for the fintech giant. It’s extremely worrying for the platform because of how fast it had grown in recent years, the fact that its users can be seeking out other forms of investments as well as investing on another platform that goes beyond the borders of this platform.

PhonePe’s User Base Growth

Contrary to all other platforms faced with decline, PhonePe saw a substantial increase in user registration. The digital payments platform which has since rolled out services that include financial products and investments has built a great number of users. The increase is due to PhonePe’s continued attempts to extend its range of offerings and lure more users through creativity.

PhonePe’s growth serves as a pointer of a bigger trend in the fintech space where customers prefer to use the platforms which offer complete range of financial services not just investment. PhonePe has gone a step further by offering a one-window solution to the users by offering it as a service which includes payments, banking and investments.

Market Implications

The diverging user base trends for these fintech companies suggest that the running of markets are changing. Under conditions of fierce competition, only the platforms with the ability to adapt and innovate will receive users’ attention. For Groww and Zerodha, the way to pull this back will be to commit to making the user experience better and expand the service they are offering to their customers.

Away from that, the emergence of PhonePe also reflects the significance of a comprehensive financial solution that draws and keeps users in the palm of their hands. Given the consumer’s increasing demand for platforms that satisfy multiple financial needs, fintechs must be able to operate with great agility and responsiveness to the changes.

Conclusion

The month of February 2025 has been a significant month for the Indian fintech landscape with both PhonePe and Zerodha propagating growth, while the same cannot be said of Groww. Nowadays, the very ability of fintech players to innovate and offer integrated services will be equally, if not more important, as the fintech market is still evolving.