As mutual funds drive the growth of investments, these 5 wealth management startups are offering financial know-how and helping people invest in the asset class.
“Someone is sitting in the shade today because someone planted a tree a long time ago.” American business mogul and philanthropist Warren Buffett has never shied away from the importance of investing and growing money.
In a country where investments have been synonymous with gold and realty, the wealth management ecosystem is slowly evolving, and startups are trying to take a bite of the equity market pie as they help Indians grow their wealth.
Arun Thukral, MD and CEO of Axis Securities, says close to 59.1 million retail investors are estimated to have invested in equities as of July 2017.
Mutual funds - with their systematic investment plans - are largely driving this growth.
Arun says the mutual fund industry added 8.32 lakh SIP accounts a month in FY 17-18 with an average ticket size of around Rs 3,200. This is an improvement from the 6.26 lakh SIP accounts added each month in FY 16-17.
Bigger players in the startup ecosystem have also forayed into the space. Bengaluru-based Zerodha launched its direct mutual fund platform, Coin, last year and claims to already have close to Rs 1,100 crore in assets under management. Earlier this month, Paytm Money, a wholly-owned subsidiary of One97 Communications Limited which owns Paytm, launched a dedicated mutual fund investments app, partnering with close to 25 Asset Management Companies.
Paytm claims its platform already has more than 850,000 users. And, 65 percent of these registrations have come from users beyond the top 15 cities of India.
With startups increasingly working to raise awareness about investment in equity markets (through mutual funds), YourStory lists a few wealth-management apps that will not just increase your knowledge, but also help you invest.
Too much information and ambiguous investment advice often confuse people who want to invest in mutual funds. Bengaluru-based online mutual funds investment platform Scripbox aims to solve that problem. The platform claims to offer an unbiased selection of mutual funds to customers who save between Rs 5,000 and Rs 5,00,000 a month.
The company was founded in 2012 by IIM-Bangalore alumni and veterans Sanjiv Singhal and Ashok Kumar. The platform allows users to sign up and select the category of mutual funds they wish to invest in - debt, equity or equity-linked savings schemes.
After signing up, the platform adopts a scientific methodology to create a basket of four mutual funds. The selected mutual funds have consistently performed over the last four years. Users can invest in the pre-selected mutual funds with one click.
According to their website, they have 350,000 users spread over 1,150 cities, and more than Rs 850 crore has been invested through their platform.
Scripbox received Series A funding of Rs 16 crore from Accel Partners and a group of leading angel investors in August 2015.
Bengaluru-based investment platform Groww was founded by ex-Flipkart employees Lalit Keshre, Harsh Jain, Neeraj Singh and Ishan Bansal. The company was incorporated in 2016 but the platform was not launched until 2017. App-based Groww allows access to direct mutual funds. Customers are on-boarded by a paperless process and the platform allows them to choose from the 2,000 tailor-made plans and used cases comprising investment options.
Groww has taken a community-based approach by initiating various WhatsApp groups. It is also available on the web.
In July this year, Groww announced that it had raised around $1.6 million as a part of its Series A funding from Insignia Ventures Partners, Lightbridge Partners, Kairos, and others. Investors Mukesh Bansal and Ankit Nagori also participated in the round. The company said it would use the investment to strengthen technology and build scalable growth channels.
In a previous conversation with YourStory, Groww claimed to have close to 2 lakh unique visitors until February 2018. From April to December 2017, the company claimed to have processed almost one lakh transactions.
Gurugram-based Sqrrl was launched by Samant Sikka, Dhananjay Singh and Sanjeev Sharma. App-based Sqrrl is targeting youngsters. The platform was trial launched with a closed audience in March 2017 and was launched for the public in July 2017.
The investment platform allows users to invest according to their needs and goals. Sqrrl’s aim is to get youngsters into the habit of saving and investing.
The platform does so by allowing users to save spare change, and later invest it. Whenever the user makes a transaction, the number is rounded to Rs 100 or Rs 500 (as per the user's discretion) and this amount is invested in mutual funds. Sqrrl also allows unlimited and instant withdrawal, round the clock. It offers support in following languages - English, Hindi, Telugu, Malayalam, Gujarati, Bengali, Marathi and Kannada.
The startup announced that it raised $1 million in June 2018, in its pre-Series A funding round from Equanimity Venture Fund. The company said it would use the funds to improve product and technology, particularly in Machine Learning and Artificial Intelligence, while improving the on-boarding process.
As of January 2018, the company claims to have attracted more than 40,000 customers, who used the platform for mutual fund investments. Sqrrl also plans to expand to loans, insurance, payments, and aspires to morph into a digital bank. The startup aims to be among the top 10 digital financial players by 2022 with an asset under management (AUM) of $14 billion and catering to 12 million customers.
Bengaluru-based wealth management app Smallcase was founded in 2015 by IIT-Kharagpur graduates Vasanth Kamath, Anurag Shrivastava, and Rohan Gupta. The platform, which allows investors to invest in “themes”, was launched a year later, in July 2016.
Users of Smallcase do not have to track individual stock performances since they are given the ownership of a stock, unlike the case in mutual funds. They let investors buy stocks, portfolios, and ETFs (exchange traded funds) to “specific themes” (such as Incredible India or The GST Opportunity) and strategies for higher returns. The final deal, however, is made on partner brokerage Zerodha's platform.
Smallcase claimed to have close to Rs 1,200 crore worth of equities and ETFs traded on Zerodha's platform in the last year, as of June 2018. According to the company, close to 40,000-50,000 smallcases (investment themes) were created by users until June this year, while only 68 were created by the company. They had 1.5 lakh registered users until June and approximately 30,000 of them had transacted on the platform.
Smallcase also plans to provide a CRM-based SaaS solution to advisors and help track their portfolio growth.
Hyderabad-based Savart was founded by 18-year-old Sankarsh Chanda in 2017. College dropout Sankarsh said he derives the name from the “art” of “saving”.
Savart went online only in June this year. In just a month's time, the company claimed to have sold mutual funds worth Rs 3.5 crore and stocks worth Rs 2 crore. The app-based platform helps users invest in markets, depending on their temperament. This, in turn, is done by analysing the users during the on-boarding process, called the Emotional Financial General Analysis. The “manual mode” in the app allows users to invest on their own, without any guidance.
Since Savart is not a broker, it has partnered with broking platform Upstox for final transactions. By the end of this year, Savart is looking to partner with three more digital brokers. It partnered with BSE for mutual funds and is planning to release an algorithm-based stock advisory for customers.
Sankarsh invested his earnings from earlier investments into Savart. The startup is also looking to have close to Rs 40 crore in mutual funds and stocks sales each by December this year. It aims to raise funding of Rs 3 crore and has a commitment of Rs 1 crore already from HNIs.
Besides these, direct mutual funds platforms Expowealth and Wealth Trust are also helping people invest. Just last month, Bengaluru-based Balance.tech was acquired by Indian payments major, Paytm. There is also ETMoney, which claims to have a user base of 1.5 lakh.
The funded players include Fisdom, which raised Rs 25 crore, as a part of Series B funding in November last year and Nivesh.com, which announced that it had raised seed funding of Rs 3 crore in June this year, through LetsVenture along with Google India MD, Rajan Anandan and other angel investors.
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