Decoding Dhan’s Journey Into The Unicorn Club Amid Investment Tech’s Lean Era

Even as investor participation is slowing down and rules around derivatives trading are tightening, Dhan has bagged its biggest round yet to enter the unicorn club.

The $120 Mn round, led by Hornbill Capital and joined by Japan’s MUFG, BEENEXT, DMart’s Ramesh Damani, DSP Family Office among others, valued Dhan at around $1.2 Bn (INR 10,000 Cr).  At more than 10X its estimated FY25 revenue of around INR 900 Cr, the valuation has put the spotlight around Dhan and its parent entity Raise Financial.

Especially, when its last valuation was around INR 1,000 Cr, nearly 10X lower than its current unicorn valuation. And given the current chill in the investment tech landscape, the new round does raise the question of what exactly is Dhan doing that its bigger rivals aren’t, and where its edge lies. 

Dhan cofounder and COO Jay Prakash Gupta believes the company’s focus on margin trading has unlocked an avenue that others have shied away from. The startup plans to deploy the raised capital primarily in two areas, doubling down on its margin trading facility (MTF) book and diversifying into complementary businesses targetting its core audience, Gupta told Inc42.

Dhan also plans to launch a standalone platform for long-term investing aimed at younger users. The product will initially offer mutual funds and will expand into other investment products, which will put it in the league of Groww and Zerodha. 

Dhan’s Multi-Pronged Strategy 

Founded in 2021 by Pravin Jadhav, Alok Pandey, Jay Gupta, Dhan is an online stock trading and investing platform. Dhan’s parent company, Raise Financial Services, operates a suite of tech-driven financial products, including ScanX (a real-time market research and analytics platform), Upsurge (an education platform for investors and traders), Filter Coffee (a media platform offering bite-sized financial content), and Fuzz (an AI model delivering contextual and verified financial insights).

Although the company had been scouting for this round since last year (having reportedly considered players like ChrysCapital), it turned to existing investors such as BEENEXT for its next round, and the COO believes this is a vindication of Dhan’s strong financial health and growing market share. 

A key factor has been the growing MTF penetration in the past two years. Dhan introduced MTF in 2022, allowing traders to invest with up to 4X leverage for trading on their principal amount. 

In return, Dhan charges interest on the borrowed funds, ranging from 12.4% to 16.4%, depending on the volume. Dhan’s MTF book reportedly surpassed INR 96,000 Cr in early August 2025. This is far ahead of Zerodha’s MTF book size is around INR 5000 Cr.

Currently, Dhan (through its main app) offers core trading and investment service for stocks, ETFs and mutual funds, but it also has a separate app called Options Trader for dedicated options trading. 

Gupta also said that Dhan is developing DEXT to reduce trade execution latency and cater to power traders. As of FY25, Gupta claimed that around 20% of the company’s revenue comes from investment products, while the remaining 80% is derived from trading activities.

It is pertinent to note that Dhan’s DEXT Engine already powers its core trading infrastructure, claiming ultra-low latency with over 95% of orders executing in under 25 milliseconds, and many under 10 milliseconds, down from 150 milliseconds previously. This is vital for pro traders who have in the past accused Zerodha and others of high latency for order execution.

Artificial intelligence is at the core of DEXT and Dhan’s other tools — Fuzz and ScanX. Together these three provide contextual, verified financial insights that improve decision-making for traders and investors. Introduced in August, Fuzz, for example, an AI-powered advisory model for power investors and professionals. 

Dhan claims that by focusing on pro traders, it is able to think of tools in a sharper manner and focus on features that this specific cohort will want to use. Even amid the diversification push, Dhan does not want to dilute its focus. 

Revenue Diversification Push

The Mumbai-based startup’s diversification push is not unique in the investment tech space. It aligns with the broader trend of brokerage firms seeking additional revenue sources amid SEBI’s tightening of futures and options (F&O) trading norms.

The reforms, rolled out between July and October 2025, have reshaped the trading landscape by slowing down investor participation, reducing the buzz around speculative trading and clamping down on influencer marketing of F&O trading. It also made it more expensive for traders to execute F&O trades. 

A majority 80% of Dhan’s trading volume comes from F&O, so naturally, one can expect a revenue impact for the new unicorn. Raise Financial founder Praveen Jadhav recently claimed the company saw 40% dent on revenue after the new rules. Gupta, however, declined to quantify the impact. 

As Inc42 wrote earlier this week, Zerodha, Angel One and Groww have been hit hard as regulations like true-to-label transparency and expiry curbs slash high-volume derivatives trading, which had fuelled 70-90% of their incomes. 

The changes include a 10% cap on individual position limits, higher upfront margins, and larger contract sizes, making it harder for small traders to speculate. For instance, investors now need a minimum annual income of INR 5 Lakh or a net worth of INR 25 Lakh to access F&O trading, aiming to protect smaller and inexperienced investors from risky trading.

Exchanges have also introduced random intraday exposure checks and stricter ban-period rules, while weekly expiries are now limited to major indices like Nifty and Sensex. The impact has been immediate, as SEBI pointed out that F&O trading volumes fell 29% in FY25 from FY24. 

Market observers expect a further slump in revenue from F&O trade-dependent discount brokerages in FY26 amid SEBI’s continued crackdown on expiry date-linked high volume derivative trading. 

Brokerage firms are expected to see revenue pressure in FY26. Angel One, for instance, has already reported a 19% YoY revenue drop in Q1 FY26 due to the new F&O norms.

Amid these headwinds, Dhan, like its competitors, is exploring new revenue avenues. While Zerodha and Angel One have branched into credit disbursement, asset management, and payments, Groww recently acquired wealthtech startup Fisdom.

Balancing Profitability And Growth 

Dhan’s diversification has brought the right results in terms of its fundamentals. On the financial front, the company swung to profitability in FY24 with a profit of INR 177 Cr on a topline of INR 380 Cr. 

These figures are expected to more than double in FY25, with projected revenue of INR 900 Cr and net profit of around INR 400 Cr. This would translate to a profit margin of about 44% in FY25, compared to 42% in FY24. The only major competitor with a higher margin is Zerodha, which posted over 50% profit margin in FY24.

However, Dhan remains behind larger peers like Zerodha and IPO-bound Groww in revenue scale.

Zerodha’s revenue from operations rose 37.16% to INR 9,372 Cr in FY24, with net profit surging 89% to INR 5,496 Cr during the same period. Groww also turned profitable with a net profit of INR 1,824.4 Cr in FY25 against the loss of INR 805 Cr in the previous fiscal year, while growing its operating revenue by 50% YoY to INR 3,901 Cr. 

Dhan charges a commission of INR 20 or 0.03% (whichever is lower) per executed order in futures and options trading, which accounts for over 80% of its total volume. Dhan also earns interest income through its MTF lending business, with rates ranging from 12.4% to 16.4%.

Its peers, Zerodha and Groww, also charge the same amount for F&O trade, while Dhan and Zerodha both charge 0 rupees in equity trading. 

Despite a challenging year marked by regulatory tightening and lower trading activity, Dhan managed to maintain its user base and even slightly grow its market share. As per Gupta, Dhan’s market share rose from around 2% in June to 2.13% in August.

Dhan’s active user base stands close to 1 Mn. While this is much smaller than Groww’s 12.07 Mn or Zerodha and Angel One’s around 7 Mn each, Dhan has grown rapidly in the past two years, though, rising from the 45th position among brokers in 2022 to being among the top 10 in 2025. While this is an impressive climb, there’s a long way to go. 

The experience of its Raise Financial founders has also played a key role in solidifying Dhan’s proposition. Pravin Jadhav, for instance, was previously the founding CEO of Paytm Money, where he helped grow the direct mutual fund platform.

This is where Dhan is hoping that its existing user base will help it overcome the initial challenges of market share. 

The COO added that by catering primarily to seasoned traders rather than mass market investors, Dhan does not need to compete directly with Groww or Zerodha. “I have spent almost 20 years in the broking industry, and the same goes for Pravin and Alok. We are not newcomers to the capital markets; we understand where to control things and where to double down. That has been our secret sauce.”