Why this real-estate startup founder moved to fintech

By Sindhu Kashyaap|10th Aug 2016
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Investments in India are rarely planned, unless you happen to be one of the uber wealthy. While there are several investment platforms today, few people are even aware of them, and fewer still make use of them. This is one of the reasons why 32-year-old Aditya Agarwal started Wealthy. It is an online investment service that makes it easy for everyone to invest like a pro.

Aditya the IIT Bombay alumnus says:

We are in the business of making people ‘Wealthy’ by helping them take smart investment decisions with even as little as Rs 5,000. We have also made it super easy to invest and our unique paperless process has made investing an Amazon-like experience.

From real-estate to fintech

The idea of Wealthy came to Aditya while he was running his real-estate investment platform getSquareFeet. While he personally was a part of several angel investing groups, he realised that most of his friends were struggling to invest their monthly surplus; they didn’t know where to invest the money and it would end up lying idle in their bank accounts.

“The problem was prevalent across different age and income groups in my social circle. My parents were also reliant on my brother-in-law for advice on their savings and investments,” says Aditya.

Team @ Wealthy

Looking at this clear need, Aditya ended up discussing the problem with his friend of 13 years Prashant Gupta, who was working at Morgan Stanley. It was Prashant who suggested the idea of automating the investment advisory and continuous portfolio management, thus making it available to retail clients across India. He had seen this being used by banks across the world for their wealthy clients.

Nuances of setting up a fintech startup

Once they tested the feasibility of automating advisory, they began working on a paperless method of KYC and onboarding. This, Aditya says, helped them set up an internet-only financial services firm in a short period of time.

After locking-in on the core services that Wealthy was to offer, the next big task was to find the right team to build the product and company. Aditya says that old networks and startup-focused platforms like Angel.co were of great help in finding the right team.

As a financial services provider, they also needed to comply with several regulatory requirements that came in with onboarding customers. Aditya says:

Here, Prashant and my prior experience in dealing with regulators and lawyers helped us sail through. Our angel investors were also of great help, especially in connecting us to the senior leadership of large mutual fund companies. Because of those connections, we were able to launch our paper-less and instant KYC process in less than four months.

The core team now comprises of Somit Srivastava, a former Ola employee, Mohit Srivastava, a former MIT Senseable City Labs Singapore employee, and Tarun Khera, a BITS Pilani alumni.

Product workings

“Wealthy works in a simple and efficient manner, beginning with asking the user about the amount of investment they want to make. Basis plans are customised and provided to the user, and if they agree on it, they proceed to open an account with us using their email or social logins,” says Aditya.

Post that, users have to provide their PAN number along with some very basic personal details. Once their KYC status is ascertained by the system, which happens almost real-time, they can proceed to make their investment online.

The entire process takes less than two to three minutes. Post the online payment, investment folios are opened typically in less than 48 hours. Details of the investment are then available on a dashboard. Users can also make withdrawals directly from their Wealthy dashboard.

The differentiators

With over $285 million already invested in fintech startups within this year, especially in the lending segment, different startups are beginning to focus on the investment management space.

There are other platforms that work towards helping individuals choose different investment options like Policy Bazaar, Prudential.com, and even ICICI Bank, which has ventured into goal-based investment with iWish. There is also Rajasthan-based Goalwise, which focuses on investments. Wealthy, Aditya says, focuses on continuous management of the investor's portfolio.

In the next offering, the code will maintain asset allocation for each investor at all-times and dynamically re-balance the portfolio as and when the market conditions affect the allocation.

Wealthy's investment plans include different kinds of mutual funds, which are also selected using a rule-based system to eliminate human-bias in selection.

He adds that their focus is on automation. Aditya explains –

In order to build a business that can penetrate deep into India and stay focused on retail investors, we need to have our cost structure right from day one.

Funding, revenue and future plans

For every rupee of investment that the team manages for their clients, they get a fee from the product manufacturers. The revenue model is akin to SaaS (Software as a Service) businesses, where they earn a subscription-like fee as long as the client continues to use the product. The difference is that the manufacturer pays Wealthy that fee instead of the client.

The team went online mid-February and claims to have processed more than 500 orders since then. Wealthy has raised investment from angel investors like Zishaan Hayath, Abhishek Goya, Rohan and Arjun Malhotra of Investopad, and some senior bankers.

“We want to build Wealthy as a service that can help put our users onto a financial path that gives them confidence about their future. Our next offering is a step in that direction, where we would be able to help an average saver invest his money smartly without needing to pour over financial data,” says Aditya.