By diversifying its fintech offerings, Tata Group’s super app Tata Neu should soon start competing with stock brokerage services like Zerodha, Upstox and Groww, according to two Coach sources.
Tata Fintech, which appears to be a backbone entity for the stock brokerage service, has also sought approval from market regulator Securities and Exchange Board of India (SEBI). The entity applied for the stock brokerage license during the last week of June and is currently showing “in progress”.
Tata Fintech is a financial entity created by Tata Digital in November 2021 and responsible for developing a digital financial services platform. Its board is made up of CureFit co-founder Mukesh Bansal, former banker Ankur Verma and Tata Digital chief financial services officer Modan Saha.
Tata Digital has invested $75 million in fitness startup Curefit in June 2021 and named Bansal president of the company.
As the pandemic raged through 2020 and 2021, many people with disposable income and limited investment opportunities turned to platforms such as Zerodha, Upstox, IndMoney, Groww, Smallcase et al to make and manage their investments . This change gave a huge boost to the growth of these companies. For Tata Neu, existing users who are already on the Neu app will obviously be the first target.
Interestingly, Upstox is backed by Ratan Tata, who has backed over a dozen startups such as Snapdeal, Urban Company, Lenskart, and CashKaro, among others.
Tata Neu launched in April to much fanfare and offers groceries (via BigBasket), luxury goods, travel, health diagnostics and medicine delivery (via Tata 1mg). It should be noted that the application already offers financial offers such as UPI, bill payments, loans and insurance.
The addition of a stock brokerage service will make Tata Neu a more attractive proposition for users. The super app has been downloaded nearly 16 million times on the Google Play Store, according to data from Sensor Tower.
However, challenges remain. Tata Neu failed to impress users due to several reasons such as poor user experience including longer loading time and lack of unified shopping cart (order pages). The super app’s chief technology officer (CTO), Sauvik Banerjjee, resigned in July after a six-year stint with the group.
Online brokerage, which demands a higher level of delivery in terms of availability, predictability, research quality and more, can prove to be a huge distraction with its requirements if the application is already struggling to follow. Declining satisfaction numbers can never be a good thing for the perception of a group built around its tech company(s) like TCS and more. And the competition here might surprise the Tatas, with a mix of institutional, startup, and well-funded brokerage apps all vying for a super competitive market.