How WealthBox is making stock trading a viable option for India's millennial?
In an age, when platforms are aggressively selling mutual funds and insurances as investment options, these serial entrepreneurs want to push stock trading as a viable option to India’s millennial.
For Vishal Devanath and Krishna Bhardwaj, starting up together wasn’t new.
Having started SME and investor connect platform, SMERGERS, the founders believe that it was an immediate hit. And now, Vishal and Krishna have plans to make it global.
But their current business idea stemmed from the previous one. While SMERGERS was connecting to private investors, a high-risk market, the same set of individuals wanted to grow their investments in the public market.
And there weren’t many trading platforms facilitating that. Thus, in May of 2016, Vishal and Krishna came up with the idea of starting a social wealth management platform, WealthBox. They add,
"We realised that there were hardly any players who were trying to make stock trading an attractive option for the young millennial, as well as other categories."
What is it hitting on?
The duo however, wanted to start with the basics.
Currently, WealthBox is a platform for investors to learn about listed companies and stocks. It empowers the investors through right knowledge for investment in the Indian equity markets.
Hence, the firm is trying to disrupt the age-old data provision systems, namely Moneycontrol and Google Finance, through better data representation and better data points.
Over a call, Vishal states,
“When you see other data platforms, it feels like a huge data dump. Further, on our analysis, we felt that for the most part, a lot of data wasn’t accurate. Simple things like stock splits and dividends were not adjusted.”
Further, with the basic fundamentals missing, most of these platforms are aiming at traders who are looking to close their books for the evening.
However, founders claim WealthBox to be much detailed in its approach.
On an overall level, WealthBox shows the stock price of a company, detailing the overall sentiment and operational efficiency of the business. To help investors make more informed decisions, the platform details out information involving bonus issued, sales of the companies, and even depicts the corporate annual results on stock prices.
The company procures this data from vendors who only provide raw data, and processes the same to bring across intelligent information to the investors. This includes a stand-alone and consolidated view of these companies.
While on an individual level, Wealthbox also acts as a personal wealth management engine, showcasing consumer’s portfolio investments in an easy to view dashboard. Moreover, unlike DEMAT trading bank accounts, the platform lists only active stocks, instead of showing returns on your entire portfolio.
However, customers can check their past stocks in the history.
WealthBox also allows consumers to execute trades on simulations mode. For first time users, this is helpful since it allows them to build basket of stocks and see results accordingly.
Currently, trades and transactions made on the platform are executed by Zerodha, through a backend integration.
At present, the firm is looking to integrate with other brokerage houses as well.
The social investor
But the engine is not as plain jane as it may seem. Similar to Facebook, WealthBox is building a community of investors, making the process of investing more social.
Hence, whenever an individual executes a trade, depending on their privacy settings they can choose to post it on their timeline for other friends to see, just like statuses.
Depending on the settings, a real-time leaderboard is also maintained on the top gainers through stock trading on the platform.
This is for other individuals to see and learn from these transactions. Without delving into details, the platform can also show an individual’s fund allocation, across market capital and industries. The news is also integrated onto the dashboard, with an option to add companies to the ‘Watchlist’.
The social platform also has the profiles of top Indian investors like Rakesh Jhunjhunwala, which BSE puts out, providing an insight into their portfolios.
This is public information released by BSE.
Making the money
With 1600 NSE companies listed on the platform, at present for the firm, information to large-cap companies and exchange traded funds (ETFs) is absolutely free.
The premium plan is priced at Rs 200 on a monthly basis and Rs 1,000 annually. The plan gives access to detailed real-time information to small-cap, mid-cap, and micro mid-cap companies.
In spite of the product being in Beta, the firm has more than 300 signups, with more than 20 paying consumers currently.
Further, with things moving towards to zero brokerage, the founders have a strong belief that they’d want to move away from the commission model.
Into the future
For this fiscal, the firm is focused mostly on product development, aiming to provide a 360-degree view to its consumers. The founders explain,
Currently for this fiscal our focus is to build a great experience for the product with focus on metrics following the year after.
But, the company does plan to reach 200 paid users by this fiscal year and 1,000 paid users by the next fiscal year.
The company also wants to introduce other financial products like mutual funds, bank fixed deposits and insurance, over time.
With an aim to keep the team small and lean, the company plans to have a team of six individuals. Wealth management seems to be the hot trend in Indian fintech with bionic robo-advisory platforms surfacing across the scene. However, with a minute percent of individuals trading, stock trading still seems to be highly lucrative, unless there is a twist to the business model of brokerage.
Presently, there are companies like RKSV and Zerodha, in the active online broking space, completing transactions. While players like WealthBox are just information support for investors to make crucial decisions of stocks.