Founder Thesis The Playbook for Building a $3.5B Fintech Unicorn | Raghu Kumar (Upstox)
"After raising millions of dollars, the first thing we did was shut down our most profitable division." This was the pivotal, contrarian decision that put Upstox on the path to becoming a unicorn. In this episode, co-founder Raghu Kumar reveals why killing their "golden goose"—the proprietary trading desk that funded the company's early days—was the secret to building a trustworthy, scalable fintech empire.
Raghu Kumar is the co-founder of Upstox, one of India's largest stock brokerage firms, valued at over $3.5 billion. A trader at heart, he started his journey by turning a personal stake of just $10,000 into more than $2 million in two years using sophisticated algorithmic trading. He then co-founded and scaled Upstox to over 13 million users before moving on to his next ventures, Rain Platforms and Tylt Money.
In this conversation with host Akshay Datt, Raghu Kumar unpacks the foundational thesis behind Upstox's massive success.
Key Insights from the Conversation:
- Trading to Build: Raghu's first venture was not Upstox, but a proprietary trading firm that turned a small stake into millions. The profits from these trading strategies, first in the US forex markets and later by arbitraging Indian stocks, provided the seed capital for the brokerage.
- Strategic Sacrifice: A critical turning point was shutting down their profitable proprietary trading desk after raising their Series A funding. This eliminated any potential conflict of interest with their clients and forced the entire company to focus on the scalable retail platform.
- Tech-Driven Disruption: Upstox was a pioneer in using technology to solve core friction points. It was the first brokerage in India to offer a completely paperless account opening process using Aadhaar and one of the first to provide a retail API for users to build their own trading algorithms.
- India's Unique Algo-Trading Culture: At the retail level, more individuals are building and deploying their own automated trading algorithms in India than in any other country in the world, including the US.
YouTube Timestamps & Chapters:
00:00 - From a $10,000 bet to a $3.5 Billion Company
01:19 - The Forex "News Trading" Strategy that Made Us Millions
02:56 - Why We Moved to India: The Arbitrage Opportunity
11:41 - The Secret Sauce: How We Traded India's Inefficient Markets
20:58 - Why We Started a Brokerage: The Birth of Upstox (RKSV)
25:39 - Disrupting the Market with Unique Pricing & Growth Hacks
35:25 - The Engine Room: What it Really Takes to Run a Brokerage
40:14 - Building Upstox Pro: From Third-Party Software to In-House Tech
48:18 - India's Unique Edge: The Rise of the Retail Algo Trader
52:57 - The Tiger Global Investment & The Future of Indian Investing
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