This fintech startup by IIT alumni uses AI to give investors access to curated portfolios
IIT Delhi and IIM Bangalore alumnus Asheesh Chanda, who has over 15 years of experience in the finance sector, was part of the investment and financial community in Singapore.
While working in the finance sector, Asheesh had seen first-hand how people’s reaction changed towards advisors and service providers post the 2008 economic slowdown. People had lost trust in the system, and were holding their advisors accountable like never before. Investors were looking for a platform, which gave them the freedom to make informed decisions.
The need for personalisation, transparency, and trust among investors was the driving factor for Asheesh’s decision to createin 2016. Asheesh was later joined by his classmate from IIT Delhi, Vineeth Narasimhan, a product expert with nearly two decades of experience building Cloud and mobile solutions. He is also a gold medallist from IIM Calcutta.
Headquartered in Singapore, it is an online asset management platform that gives investors access to independent advisors and portfolio managers.
The core backbone of the platform is built by O2O Technologies Singapore, which was founded by Asheesh in 2016.
“If you compare India with a country like Singapore, you will see a vast difference in the general level of financial awareness. Indians have only woken up to ‘Mutual Funds Sahi Hai’ after a protracted campaign, and are now starting to realise the advantages of ETFs with the launch of Bharat Bond ETF. The industry is ripe for change, and AI-based robo-advisories can be the harbinger of this. With robo-advisories like Kristal.AI, Indian investors will be able to take back their power and invest in strategies that have been handpicked for them, rather than relying on someone else to choose an investment vehicle on their behalf,” says Asheesh.
With over 70 employees, the startup is currently operational in Singapore, Hong Kong, India, and the Middle East, and has clients from over 22 countries.
How does it work?
As a B2C investment platform, Kristal.AI offers solutions across the investing spectrum - from the mass affluent to the UHNWIs.
“Investors can get started with us with the ‘Kristal Investment Account’, which is free for investments of up to $5,000, and allows you to access curated global ETFs,” says Asheesh.
The startup has an in-house Investment Committee (IC) made up of experts who have spent years in the trading and financial domain, and have a cumulative experience of 120+ years in the industry.
From boutique investment options to emerging markets, the IC is responsible for looking out for stellar investment opportunities across the global financial fiefdom. The IC, with the help of Kristal’s algorithm GAIAA (Genetic Algorithm-based Iterative Asset Allocation), cherry picks the best ETFs (exchange-traded fund) from the pool, runs simulations to check for the strength of each portfolio, and automatically monitors portfolio performance.
For more sophisticated solutions, it has the Kristal.AI ‘Funds Platform’, which is designed for the accredited investor.
“We have partnered with premium funds in the business to bring their optimum strategies directly on the Kristal.AI platform. One can pick any from the choices on offer or invest in the in-house fund Kristals that our experts have put together after careful market analysis and research,” explains Asheesh.
Kristal.AI also offers a ‘Managed Accounts’ solution whereby investors can integrate, manage, and access multiple private bank accounts via a single platform, with on-the-go analysis. For those who are interested, it provides a curated service called ‘Private Labelled Funds’, which are bespoke strategies that help investors get exposure to multiple asset classes.
While the ‘Investment Account’ is free of charge for up to $5,000, the startup charges a small fee for its other offerings.
At present, Kristal.AI counts DBS Bank, SAXO Capital, and Interactive Brokers as its custodians. SAXO and IB also act as its brokers.
“We are regulated by the Monetary Association of Singapore (MAS), the Securities and Futures Commission in Hong Kong, and by SEBI in India. Our regulators see to it that we stand by our promise of trust and transparency in every way. We use bank-level safety processes for data protection, and all payments are done via DBS Bank to ensure safe conduit,” says Asheesh.
The invest-tech market
A Nasscom-KPMG report estimates the total fintech software and services market in India was around $8 billion in 2016, and is likely to grow 1.7 times by 2020.
The startup currently competes with the likes of Hedge Guard, Score Chain, and Novum Insights. However, according to Asheesh, there are many companies which call themselves 'fintech' but not all of them use deep-tech and machine learning to enhance a client’s investments.
“The Indian market lacks a true Robo-advisor that uses the power of AI to curate strategies and provide personalised advisory and portfolio recommendations. But we don’t rely on AI alone. We have an internal committee, which also looks at all the strategies on our platform and assists the curation process. The mix of AI and human empathy is what sets us apart from most invest-tech startups,” says Asheesh.
Over the years, Kristal.AI claims to have seen a growth in the customer numbers. It says that it saw 185 percent growth between December 31, 2018, and May 31, 2019, where its AUM (Asset-under management) increased from 26 million to 45 million.
The startup also closed Series A round of $6 million early this year, which was led by Chiratae Ventures and Desai Family Office.
By early this year, the team plans to launch a full-fledged product suite in India. Through this, it aims to expand the product range and offer more access to Indian investors. It also plans to consolidate its presence in the home ground of Singapore and Hong Kong, with more private banking solutions, and expanding to other areas in APAC and Middle-Eastern region.
(Edited by Megha Reddy)