Daybreak - How Dhan, a broking startup, defied a slowing market and turned from dark horse to unicorn

Episode Date: October 6, 2025

Even as markets wobble and trading volumes shrink, one online broker has raced ahead. Dhan, a four-year-old broking startup, managed to grow rapidly, post profits, and raise $120 million at a $1.2 billion valuation—all in the middle of a market correction.In this episode, we look at Dhan’s journey from a niche platform for power traders to one of India’s newest unicorns.What's making investors so bullish on Dhan when the rest of the industry is slowing down?Tune in.Correction note: In this episode, the host mistakenly referred to Dhan’s raise as $120 billion; the correct figure is $120 million, led by Hornbill Capital, valuing the company at around $1.2 billion.Daybreak is produced from the newsroom of The Ken, India’s first subscriber-only business news platform. Subscribe for more exclusive, deeply-reported, and analytical business stories.

Hi, this is Rohan Dharma Kumar. If you've heard any of the Ken's podcasts, you've probably heard me, my interruptions, my analogies, and my contrarian takes on most topics. And you might rightly be wondering why am I interrupting this episode too. It's for a special announcement. For the last few months, I and Sita Raman Ganeshan, my colleague and the Ken's deputy editor, have been working on an ambitious new podcast. It's called Intermission.

We want to tell the secret sauce stories of India's greatest companies. Stories of how they were born, how they fought to survive, how they build their organizations and culture, how they manage to innovate and thrive over decades, and most importantly, how they're poised today. To do that, Sita and I have been reading books, poring over reports, going through financial statements, digging up archives, and talking to dozens of people. And if that wasn't enough, we also decided to throw in video into the mix. Yes, you heard that right. Intermission has also had to find its footing in the world of multi-camera shoots in professional studios, laborious editing, and extensive post-production.

Sita and I are still reeling from the intensity of our first studio recording. Intermission launches on March 23rd. To get alert, as soon as we release our first studio recording, episode, please follow intermission on Spotify and Apple Podcast or subscribe to the Ken's YouTube channel. You can find all of the links at the ken.com slash I am. With that, back to your episode. The Indian stock market is not exactly having its best moment. The indexes are down, volatility is up and traders are vanishing fast. Over the last couple of weeks, markets have been on the edge. The Censex and Sandsex and

and Nifty recently went through an eight-day losing streak, which is their longest in months. And analysts are now saying that there is a two-and-three chance of a bearish October. Foreign investors have already pulled out nearly $3 billion from Indian equities in September alone. This is a clear sign that sentiment is weakening and trading activity is thinning out. A few months ago, Nitin Kamat, the founder and CEO of Ziroda, warned that brokers were seeing a massive drop in both trades and traders. And yet, something surprising just happened. In the middle of this correction, as brokers count their losses and regulators tighten the screws, a young four-year-old broking startup called Dhan has turned into a unicorn.

That's right. Dhan has officially raised $120 billion, led by Hornbill Capital, at a valuation of about $1.2 billion. It is now one of 2025's newest unicorns and the first from India's broken industry in years. Now, what makes this so fascinating is that it is not happening in a bull market. So why would investors double down on a broken company now, that too, at such a rich value? A few months ago back in March, when rumors first began about private equity firms circling Dhan, the question was the same. What does Dhan have that others don't?

What exactly is driving this dark horse that has just become a unicorn? And can it really stay ahead in a market that is shrinking? Welcome to Daybreak, a business podcast from the Ken. I'm your host, Nick Da Sharma, and I don't chase the new cycle. Instead, every day of the week, my colleague, Rachel Varghees and I will come to you with one business story that is worth understanding and worth your time. Today is Tuesday, the 7th of October. Let's rewind a little bit to before Dhan became a unicorn.

When Praveen Jadav founded Dhan back in 2021, he wasn't starting exactly from scratch. He had already built a track record at PETI Money where he was the founding CEO. And at Petya Manny, he helped the company dominate the direct mutual fund market, grabbing more than half of all direct SIPs in under 18 months. But Dhan was a different bet. This time, Jadav was not chasing mass market investors. He was going after a niche, super traders. These are seasoned high-frequency market participants,

people who live in the world of options and derivatives. As Jadav wrote in an early blog, there is no space to grow in broking unless you offer a better differentiated experience. And that has become Thun's foundation. The platform focused on speed, depth and tools that serious traders need. As one analyst put it, Dhan is not for beginners.

It is for those who already know what they're doing. And that strategy started paying off quickly. Between 2022 and 2024 March, Dhan's active users grew by more than 10 times. reaching nearly 5 lakh. By early 2025, which is this year, that number was approaching 1 million, and this is according to NSC data. In August 2024, it even overtook PETM money to break into India's top 10 discount brokers. Financially, the story is just as dramatic. Moneylicious securities, the company that operates dhung from a loss of close to 30 crore rupees in the

financial year 2023 to profit of more than 150 crores in the next financial year. By September 2024, the same year, profits crossed 200 crore rupees on a revenue of a little more than 450 crores. Backed by Ray's financial services, Dhan had raised about $22 million previously from B-Next, Miray asset ventures and 314 capital. But its real edge came from focus. According to ratings agency care, Dhan's emphasis on active derivatives traders led to higher quality clients and stronger revenue per user. In case you're confused about derivative trading,

it is when investors trade financial contracts whose value is based on or derived from another asset, like a stock, index, commodity or currency. So instead of buying the stock itself, they buy a contract that bets on high. how that stock's price will move. The two most common types of derivatives are futures, which is basically an agreement to buy or sell something at a fixed price on a future date.

And options, which is a contract that gives the trader the right, but not the obligation to buy or sell at a certain price before a set date. So in simple terms, if you think a stock is going up, you can buy an option or a future and profit from that move without owning the stock. If you're wrong, you can lose money very quickly. Which is why derivative trading is often described as high risk, high reward, and it is popular among experienced or power traders, but not recommended for beginners. Now, coming back to Dhan's average revenue per user or RPU.

For the financial year 2024, it was $12,876, nearly on par with Zeroda and well above its peers like Grow and Angel 1, and its net profit margin was over 40% versus the 15 to 25% which is seen among most others. So in a hyper-competitive market, Dhan had quietly placed itself between the incumbents and the disruptors, lean, profitable and growing fast. No wonder private equity firms were knocking earlier this year. But now, with its unicorn round complete, the question isn't why investors are interested. It is how Dhan got here so fast. Stay tuned for more on this. Dhan's rise was not an accident. It was execution, the kind that Jadav has become known for. Between 2022 and 2025, Dhan climbed from 45th among brokers to 13th and then into the top 10.

By January this year, it held about 2% market share. And the most of the most of the most of the market share. interesting part is that its growth was not driven by aggressive discounts. Like its peers, Dhan charged 20 rupees per trade. It did experiment like offering a 50% discount for women traders in 2022, but that was discontinued after some misused by men. So instead, Dhan invested heavily in product and infrastructure. Jadav has often said that nearly 90% of spending should go towards technology, not marketing, and that shows. In the financial year 2023, marketing expenses made up 70% of the revenue.

But by the next year, that dropped sharply to just 7%, far below Grow or Angel 1. So it was not just about saving money. It was about shifting focus to build something sustainable. Even the marketing it did was quite creative, like partnering with city flow, which is a premium Mumbai bus operator to advertise on buses instead of stadiums. All of this helped Dhan post its first ever profit in the financial year 2024. As one rival executive told my colleague Archishma Ayer, when a company focuses on infrastructure and tech, customers take care of themselves.

Still, Jadav remained cautious. In an email to the ken, he said, and I'm quoting, we have a lot of ground to cover to be in the same league as Zeroda and Groh. I am heads down with execution. This was in March. Fast forward to now, October 2025, and that execution seems to have paid off. Dhan's $120 million fundraise led by Hornbill Capital has pushed its valuation to about $1.2 billion. Reports say that Dhan's FY 2025 revenue is projected to hit around $900,000,000,000.

crore rupees. But of course, the backdrop is not that easy. Since last September, markets have been sliding, with the nifty 50 down by 12.5%, mid-caps by 19% and small caps by over 24%. And Sebbies crackdown on F&O or futures and options trading has added to this pressure. Ziroda expects up to a 50% hit on its top line. Dhan has warned of similar headwinds. But analysts believe that Dhan might handle it better, because its user base is made up of largely power traders and not hobbyists. And this is also what gives investors confidence. They are not betting on the hype. They are betting on stability, profitability and long-term play. As one analyst put it, Dhan's users trade for a living. They do not disappear when the markets dip. And that is what

makes Dhan's model durable. So, yes, the industry is cooling. volumes are shrinking and regulations are tightening, but sometimes the real winners emerge not in the boom but in the correction. Daybreak is produced from the newsroom of the Ken, India's first subscriber-focused business news platform. What you're listening to is just a small sample of a subscriber-only offerings and a full subscription offers daily, long-form feature stories, newsletters and a whole bunch of premium podcasts. To subscribe, head to the Ken.com and click on the red subscribe button on the top of the website. Today's episode was hosted and produced by my colleague Snitha Sharma and edited by

Rajafzian.