How research platform PrimeInvestor is enabling customers to make smart financial choices
India Startup Outlook Report 2020 by InnoVen Capital suggests that fintech will be the hottest sector this year. However, experts suggest that while digital payments have been a big hit in India, digital investments are yet to come to the limelight. This can be mostly attributed to the poor financial literacy rate in India.
While there is no concrete data available, a survey by Standard & Poor’s Financial Services reveals that less than 25 percent of South-Asian countries’ adult population is financially literate.
However, with the increasing number of fintech startups in the country, urban India, mostly the millennials, have started investing in a DIY (Do-it-Yourself) fashion. While everyone wants to save up and get the maximum return on investments, not many know which plan works best for them. This is where PrimeInvestor.in comes in.
Founded in August 2019, PrimeInvestor is a research-as-a-service platform, providing recommendations for financial products. It has put together a team of experienced researchers to provide quality recommendations for financial products, at an annual subscription cost of Rs 2,500.
The Chennai-based startup was founded by Srikanth Meenakshi, former co-founder of digital investment platform FundsIndia, and its research team heads Vidya Bala and Bhavana Acharya.
PrimeInvestor is certified by the Securities and Exchange Board of India (Sebi), and is incubated in the FinBlue programme of Software Technology Parks of India (Ministry of Electronics and Commerce).
Team of experts
“People are gravitating more towards direct-to-manufacturer approach for obtaining financial products like direct mutual funds and low-cost insurance. While they do save on expenses and fees on doing so, they often end up with products which cost more in the form of sub-optimal returns,” says 51-year-old Srikanth, who has a master’s in Computer Science from Oregon State University.
Srikanth, along with Vidya (40), a chartered accountant, and Bhavana (34), who has an MBA in finance, exited FundsIndia mid last year to focus full time on PrimeInvestor. Working on the R&D for six-months, PrimeInvestor rolled out its services in February this year.
The startup is bootstrapped with Rs 25 lakh, with equal contribution from each of the co-founders. The present team size is five, but, “We are looking to grow to about 10 by the end of this year,” Srikanth says.
How does it work?
Users or investors can subscribe to the platform and start using it immediately. PrimeInvestor offers a bouquet of investment packages and solutions for its subscribers. It has 20 portfolios that users get to select from, based on their needs or life-situation.
Srikanth explains: “We have portfolios for different time-frames, different goals (like retirement or education), and different needs (regular income, growth, etc).”
It also offers something called Prime Portfolios, which is based on life situations such as starting a new job, becoming a parent, retirement, etc. Users get the exact investment choices (funds, deposits, and government schemes, with percentage allocation for each). The platform also provides detailed guidance and rationale for each of these portfolios.
“A lay investor can simply pick any of the portfolio(s) relevant to them and buy the same in any platform of their choice,” says Srikanth. The platform then updates the user on the developments of the platform’s portfolio.
A more discerning investor can use PrimeInvestor’s recommended list of funds and ETFs to build their own goals.
“They will receive updates every quarter on whether there are any changes in our view in the funds they hold,” he adds.
For experienced investors, PrimeInvestor has introduced ‘Theme Park’ to pick funds, ETFs for a theme, or the strategy they believe in. A theme park is essentially where users can go with an investment idea and seek guidance on how to implement that idea in the market. Finally, all users get to use PrimeInvestor’s review tool to receive expert opinion on their portfolio.
According to the team, all the research and recommendations are updated every quarter. Besides this, PrimeInvestor publishes quality content based on strategy calls, recommendations, and market analysis, thrice a week. All these products, packages, and content services are made available for an annual subscription fee of Rs 2,500.
Personal finance affects the entire working class. Having said that, PrimeInvestor targets people who either invest, or are curious about investing.
“Of the Rs 15 lakh crore individual investors’ assets in mutual funds, one-fifth is through DIY investors. Association of Mutual Funds India suggests that over 20 lakh investments could be through the DIY mode. That is a sizable sweet-spot market for our business,” says Srikanth.
Players including PersonalFN, MoneyLife, Value Research, and Morning Star also provide research as a service. However, Srikanth believes the offerings of these players are limited or exclusive, while PrimeInvestor’s services span over all product classes in the financial market.
PrimeInvestor’s only source of revenue is the subscription fee it charges from its customers, and does not depend on any commission, brokerage, or ad revenue.
Since its launch, the startup claims to be having 2,000 registered users, and 500 paying subscribers.
“This has been achieved with no paid marketing spends, and with only word-of-mouth and social media posts announcing our launch,” says Srikanth.
While it is too early to comment on a run-rate, PrimeInvestor is targeting a 100 percent growth every year, for the next three years. In fact, Srikanth says they are not looking at raising funds yet, and are well-placed financially.
(Edited by Megha Reddy)