Next-generation investing platforms

Over the last 5 years, there has been a phenomenal growth in the number of investors coming online and investing in mutual funds, digital gold, stocks, cryptos, etc. A combination of markets crashing during covid, ease of opening demat accounts, people getting time to spend on investing and growth in finance-related content on youtube led to many new investors coming to the markets.

Today, we have many popular investing apps like Zerodha, Groww, Upstox, AngelOne, Paytm Money etc. There has been great progress on making it easy to open a demat account and start investing / trading. Current platforms are transaction platforms. The business model here is to maximize revenues via trading. Few platforms give basic data for decision-making on the platform in terms of charts, and stock fundamental data. Most of the platforms either charge investors an annual platform fee or charge for the delivery-based orders. These companies earn small revenues when you apply for an IPO too. Many of the platforms have youtube content and educational websites for the investors/traders to upskill.

But investing properly is still hard for most investors

To be a successful investor requires you to have sufficient knowledge, experience, decision making capability, and a decent investing strategy. Investing properly and getting decent returns consistently takes a lot of time, knowledge, experience, and effort. Even after spending the time, many of them are very likely to make mistakes and get very poor returns. There are many reasons for this.

1. Too many options — 3000+ Mutual Funds / 5000+ stocks / IPOs / Crypto / US Stocks / Gold / Bonds / P2P lending / Alternatives etc. There is always something new that tries to entice investors offering better returns.
2. No proper portfolio with asset allocation as per the risk appetite — Most investors end up with messy portfolios (15+ Mutual Funds, 20+ Stocks). They don’t fully understand the importance of asset allocation and diversification.
3. Poor Research — Most end up buying/selling based on research via Moneycontrol, Twitter, Youtube, etc. Constantly getting opinions from others lead to constantly tampering with the portfolio.
4. Irrational Decisions — Investors make a lot of irrational choices (tend to buy things that have given higher returns in the past, invest a lot in some particular stock or an asset like cryptos, buy-sell too quickly)
5. Panic during volatile markets — Feel lost when markets are volatile and going down. When to invest / exit is something investors struggle with. Most don’t use the opportunity to invest when markets are down due to a lack of confidence.

The next phase of investing products will need to solve for these

1. Simplify the research both for new investors and advanced investors
2. Make it easier for the investors to build their personalized portfolio
3. Nudge investors to make better choices while investing in real-time based on their portfolio and past investing behaviours
4. Solve the behavioural aspect of investing through timely personalized information
5. Make the investor feel confident in his/her decisions
6. Help them to avoid making basic mistakes and also make it difficult to make big mistakes
7. Help investors understand their performance across different investing strategies and measure the performance across time
8. Guide them in developing the habit of sticking to a defined long-term strategy and investing consistently across market cycles

Some companies are trying to build robo-advisory products and few are building expert-led advisory services based on regular mutual funds. We believe that there is a huge potential for investment products that reduce the time investors need to spend to get decent returns, reduces the entry barriers to get personalized investing plan across all relevant products and help investors feel confident in their decisions through expert advice. We are building a product to address some of the above problems. It’s quite challenging and requires building some differentiated technology.

Interesting in solving some of the problems or already building something interesting in this space? Let’s have a chat.

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