At 13, Anurag Bhatia was investing his parent’s money in the stock market. now, he runs a wealth management startup for 3,000 clients.
Anurag Bhatia, born and raised in Kolkata, was not even a teen when he got interested in the stock market. His parents encouraged him to cultivate a hobby and Anurag chose a book on profitable investments in the stock market, written by TS Grewal. He was so hooked that he finished the whole book in a day.
By the age of 13, he had started investing his parents’ savings in the stock market, which all resulted in great outcomes.
Ten years later, at 23, Anurag ventured into private wealth management with his startup Minance. Today, with 3,000 customers, Minance is a profitable bootstrapped company. The Bengaluru-based startup plans to open satellite offices in Pune, Hyderabad and Chennai soon.
Making of an entrepreneur
Maybe it was destiny - Anurag, now 26, was a science student, yet pursued internships at various financial institutions. He graduated in Finance from Manipal University and pursued postgraduate research in financial mathematics at the London School of Economics. His first job was at Amazon India - as a Risk Analyst. In fact, it was at the Amazon India office that Minance was born. Anurag had a reputation for his thorough knowledge of the stock market, which he would share with colleagues.
When he decided to build on that the knowledge and experience of the stock market, Anurag’s colleagues were more than supportive. “Six of us would often stay back in the office after work hours, and work on developing the (Minance) website. In fact, the first engineer in Minance joined from Amazon,” he recollects.
Anurag started up in February 2014, while continuing to work at Amazon. In just a month, Minance – which combines money and finance - had acquired more than 50 customers, all employees at Amazon India. They, in turn, referred their friends as who were top-level employees at companies like Infosys and Accenture, growing the customer base of Minance.
Finally, when Anurag left Amazon (less than two years after he joined the company) to work on Minance full time, he was accompanied by three of his colleagues.
In 2015, Anurag’s friends from college (Manipal) – Adhiraj Singh and Sarbashish Basu – joined him in the venture. The former is now COO and Head of Investor Relations and the latter is VP, Tech and Operations, at Minance.
Devising a startup
Anurag personally spoke with the first 1,000 potential investors, of which around 80 percent converted into Minance’s customers.
Unlike bigger players such as Kotak Wealth Management, which target clients looking for long term plans for around Rs 30 crore, Minance looks at a larger audience, with a minimum corpus amount of Rs 5 lakh. (In the first year, the minimum investment corpus at Minance was Rs 5000, which later became Rs 25,000 and kept moving up since customised service demands a higher cost structure.) The current average corpus is Rs 8 lakh.
Minance charges 5-10 percent as a fee (on performance base), which contributes to a bulk of its revenue. Proprietary trading, tax consultancy, and brokerage are the other sources of revenue. Although some European and Indian wealth management companies expressed their interest to invest in the firm, Minance did not want to be another arm for them.
In fact, Minance is set to end this fiscal with about Rs 18 crore in revenue and Rs 2-3 crore in profit. Anurag claims this is 40 percent higher than the last fiscal. “We have had 300 percent annual growth in revenue since inception,” he adds, attributing it to their business model, which assures positive unit economics for every transaction. “We keep the costs to a minimum,” he says, adding that hiring is not an expensive process for Minance. “In fact, one of our tech guys was among our earliest customers. We have hired only one IIT-ian so far,” he says. Minance is now a team of 40.
Minance is an Authorised Person (AP) of Mumbai-based financial services company Angel Broking and a Registered Investment Advisor (RIA) with US-based Interactive Brokers. It decided to partner with a broker because it wanted to focus on core business of wealth management and not be bogged down with broking operations.
“We didn't have to spend tonnes of money on brokering licences or dedicate resources to build a brokering platform. But this does not mean we are a subsidy, Minance is an independent company,” Anurag adds.
Minance has multiple products to offer its clients:
- Arbor uses hedged futures and options strategies to generate regular income.
- Bloom caters to long-term investment needs, with a 3-5 year investment horizon.(Investment in Arbor and Bloom requires a minimum capital of Rs 5 lakh and is offered under five risk categories.)
- Mutual funds demand a minimum investment is Rs 1 lakh or systematic investment plan (SIP) of Rs 20,000. Minance helps leverage the Efficient Frontier Theory to maximise gains.
- Assets Pay Cash collateralises your mutual funds and uses the margin received to employ safe strategies. The minimum investment is Rs 3lakh.
- Global Equities: Minance offers a portfolio of emerging markets exchange traded funds (ETF), blue-chip companies across the world and stocks picked to according to a long-term, macroeconomic theme.
- Fixed Income: Designed for conservative investors, this product consists of a portfolio of corporate and government bonds which generate consistent returns and come with minimal risk. The minimum investment is Rs 1 lakh.
Clients take a psychometric test to identify their recommended risk profile. Once a partner has invested in a product, Minance sends regular updates on strategies taken, stocks purchased, and industry news, which could affect their investments.
A partner's risk profile determines the type of derivatives strategies and the stocks, which Minance buys for his portfolio. A partner with a higher risk profile will have trades with a larger payout but also a higher risk of loss.
Minance’s current focus is on increasing assets under management and the amount of investment, as well as the returns it provides (compared to risk). The startup’s competitors are mostly players in mutual funds, real estate, and the likes of Paytm Gold and Money. But customer service comes first for the company. “We do not set a target in revenue, because that might take the focus away from our customers,” Anurag signs off.