Investment in financial assets is complex and confusing for most individuals. Traditionally, people have depended on financial intermediaries – like banks and asset managers – for advice on investing their money, and, for a long time, it has seemed that wealth creation, specifically from financial assets, is for those select few who understand the workings of a financial system.
Only two percent of India’s population today is invested in non-banking financial assets, FKCCI research shows, and the main reason behind that is a lack of trust in money managers, in the information available online, and in a system that only partially educates the financially illiterate.
Kolkata-based StockEdge understood those problems well. The startup realised that to get people interested in investing money in stocks, bonds, funds, and other financial instruments, they would need to be a source of unbiased information, with the sole agenda of informing and educating Indians about the various options available in the market.
"We are putting the power of right knowledge – through access to financial data and unbiased analytics – in the hands of retail investors, in the most effective and affordable manner," says Vinay Pagaria, who, along with Vivek Bajaj and Vineet Patawari, founded StockEdge in 2015.
The early days
StockEdge is a registered product and separate entity under Kredent InfoEdge, which was set up by the three founders in 2015. Kredent was set up to teach investors in Kolkata the various aspects of finance, at their offline centre – Kredent Academy.
Soon after, the three certified chartered accountants launched an online platform – elearnmarkets.com – to expand their reach.
The trio shares a common passion for democratising financial markets in India, and both – elearnmarkets.com and StockEdge – work along the lines of simplifying investing for the common man.
The founders began with a basic problem statement: over the last 20 years, financial markets have been dominated by financial intermediaries and financial media companies. Intermediaries, such as investment banks, carried the responsibility of providing end-to-end solutions for managing money – right from handling investment-related transactions, and investing, to investment advisory, and broker research.
Financial media, on the other hand, dispensed important information for investors, such as economy-related news, companies’ quarterly numbers, and so on.
Neither holistically taught customers the A to Z of investing.
But, now, since the industry is evolving from the sellers’ side to buyers’ side, each component of this traditional service has been witnessing a disruption. For example, transaction services have been taken over by specialised transaction platforms – like discount brokers. Similarly, several independent platforms are launching their own broker research, and other knowledge-related products.
The smaller units, that traditionally come together to form an investment bank, are now becoming separate companies in their own standing, and the industry, as a whole, is becoming more and more fragmented, giving investors the option of picking and choosing services they need to make informed investment decisions.
“Less is more has become the new norm in the information domain," says Vinay.
StockEdge’s enterprise software is an editorially neutral, value-added platform that incorporates research and knowledge services for investors and new-generation advisors. It is comparable to platforms such as Reuters, or Bloomberg, which are mostly used by large wholesale enterprises.
"We are building a similar ecosystem, but for retail investors, and at cost-effective value additions. There are various individual players emerging in this domain, but we provide the most integrated solution, with a regional focus, for better user experience," says Vivek.
StockEdge outlines four goals someone new to investing should aim to achieve, one after the other, over the lifecycle of learning the trade:
- Becoming more self-aware
- Getting access to data and analytics
- Collaborating with others for an idea
- Transacting with personalised financial goals.
For beginners, StockeEge has developed a structured learning flow in multiple languages. But for someone who already actively interacts with the markets, and would like to create their own analysis, the startup has built a financial data and analysis tool. All its products are integrated and flow smoothly, which helps a user move up the value chain in their investment journey.
"We intend to develop more product and features around the lifecycle of someone learning how to invest, and we believe this will help them trust their own abilities, and become better investors," says Vinay.
StockEdge initially started with its own content, which it used to train retail investors. The first batch the startup trained had 30 students, who, on an average, paid Rs 10,000 each for the offline course.
The founders have personally invested close to Rs 4.5 crore in the startup. In 2018, it raised Rs 3.5 crore from marquee investors like Ramesh Damani, Ajay Sharma, and Dinesh Agarwal. The total investment amount to date has been around Rs 8 crore.
The biggest obstacle the startup faced was convincing retail investors that they needed proper training, and that it was worth paying for such a course.
However, the scenario is changing, and the startup is seeing more and more millennials willing to spend money and time on value-added services.
The business model
The StockEdge app works on a ‘freemium’ model. It offers free content and features to users, and, depending on its usage behaviour, recommends premium content to them. The premium content includes research inputs and training modules created by StockEdge and its experts.
Both of Kredent InfoEdge’s units – Elearnmarkets.com and StockEdge – have been generating revenues, and the founders are now looking to scale them in terms of onboarding more users, and bettering the technology.
The founders aim to make StockEdge India’s first social investing platform which uses credible financial data and unbiased robo-analytics. This move – planned for the next 18 months – will need significant investment in technology, data and machine learning, and it is actively looking for Series A funding.
"What Bloomberg did for institutional investors, we are building for individual investors,” says Vineet.
“We are the only non-broker firm in India that’s building an ecosystem with tightly integrated value-additions. Most of the existing players have transaction-first orientation, whereas we have a knowledge-first focus," he added.
Currently, the startup’s clientele includes first-time market participants, as well as existing traders and investors.
StockEdge’s app has been downloaded over 1.5 million times, and has a user base of around 750,000, as of latest count. On a monthly basis, the app has 300,000 active users, who spend, on an average, ten minutes each.
Some users have also started buying the startup's premium, and value-added services. StockEdge estimates that so far, around 26,000 users have transacted 68,000 times on the platform.
It generates around Rs 65 lakh in revenue per month, and expects to end 2020 with revenue in excess of Rs 8 crore. The startup competes with companies such as FinTapp, Reuters, and Bloomberg.
(Edited by Aparajita Saxena)
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