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Managing $3 Billion Of Wealth | Mukesh Kalra @ ET Money
355 Plays3 years ago
Mukesh Kalra speaks about how to scale up using a product-led growth approach and how his venture is challenging the status quo of the entire financial service industry.
Know about:-
- Stint at InMobi, India’s first tech unicorn
- Factors for running a successful Fintech business
- Mutual fund as customer acquisition tool
- Personalising investing strategies
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Transcript
Introduction to Zencastr and ET Money
00:00:00
Speaker
Before we start today's episode, I want to give a quick shoutout to Zencaster, which is a podcaster's best friend. Trust me when I tell you this, Zencaster is like a Shopify for podcasters. It's all you need to get up and running as a podcaster. And the best thing about Zencaster is that you get so much stuff for free.
00:00:18
Speaker
If you are planning to check out the platform, then please show your support for the founder thesis podcast by using this link zen.ai slash founder thesis. That's zen.ai slash founder thesis. Hi, I'm Mukesh Kalra here, and I'm the founder CEO of E.T. Mani.
00:00:46
Speaker
Indians are amongst the highest savers in the world, but the way in which we save is changing. The trusted financial advisor who used to help our parents save is now replaced by a plethora of investing apps. And one of the biggest apps for investing your money is ET Money, which helps Indians manage more than $3 billion of wealth.
Mukesh Kalra's Journey and Education
00:01:05
Speaker
Mukesh Kalra, the founder of ET Money, talks to Akshay Dutt about starting up, failing and starting again. He shares his insights on how to scale up using a product-led growth approach without burning crazy amounts of money in marketing and their path towards becoming a highly profitable unicorn. Listen on to the decade-long journey of a fintech pioneer.
00:01:25
Speaker
We started selling phones and then we actually figured out that selling phones to companies is great because they have a larger requirement of phones. So that was probably my first startup and it was quite crazy and probably the first startup turned a profit. So that's how we actually got into building business.
00:01:48
Speaker
So why didn't that become a long-term gig? Why was it like just a short-term gig? Probably getting into MBA became like a very natural thing that first we do that, then figure out a way to build a business. So what did you want to do during an MBA? Like finance, sales, what like?
00:02:04
Speaker
So it was marketing and finance. And so first job then was with Future Group and like a management training program, which is the usual one. They send you everywhere. I was managing the store at Nasik. I think that actually formed a very strong understanding of consumer behavior, frankly speaking.
00:02:22
Speaker
It was not very deliberate. I thought that let's see how it actually pans out and the way the consumer behavior actually evolves with like small incentivization and how if we used to announce Offers on like you have a 1500 bill and you get like one kg sugar-free Like and if you do the person calculation on that is like it's like 1% off ever or 5% off at man. Yeah, yeah
00:02:45
Speaker
Yeah. The very fact that it is like one kgs of sugar is coming to be free. Right. It feels substantial. It is substantial. Right. And, and then how do you bundle those products together? How do you actually, so we used to announce and offer on, on say a category of say clothes, right? Like or shopping. And suddenly you could see from the top that how the whole movement of consumers inside the stores is rushing into it. And then you move. It's very like amazing to actually, so it formed, it actually gave me a very good
00:03:15
Speaker
insights into looking at how consumer behavior gets shaped. I think that's the best training ground in retail to actually do that. And then I figured out retail is not great for me personally. And that's how I got into Nielsen. And that was more on the consulting side doing research or quantitative research and qualitative
From Nielsen to Inmobi: Early Career Moves
00:03:33
Speaker
research.
00:03:33
Speaker
And there, again, I think one of the biggest projects that we did was what was with Google. And that actually again brought me back into the whole world of internet. And that was an amazing exercise because what Google was trying to do was where are the next 100 million users are going to come, right? So that was like a very big exercise. And then post, which I decided that this was like a project management kind of a role that you were doing, like managing that research project. Yes, yes.
00:04:03
Speaker
And also actually kind of a full blown recommendation into where the users will come from and all that. So end-to-end project was there and it was fantastic because it, it, it combined consumer understanding and also how internet is getting used and everything. And that actually led me into going saying, okay, probably this is the space that I should be in. And there that's how the whole journey into the startup world for me started. And.
00:04:30
Speaker
So in movies, first product was not the ad platform, right? Like I am coach. Yeah. I was the one who built it. So it was, it was amazing. Like just a product that, that was the version one, right? Like, yeah. We said that people don't know the deals that are running around, around their locality.
00:04:49
Speaker
And SMS is a great way to add that. SMS was great. And then people used to ask for, so we had a SMS based platform to search hunt for deals. And, and it bombed like big things.
00:05:02
Speaker
And we found that everybody bloody knows the deals around and they don't want to actually know it upfront. Then the fun is in the chase of the deal, then getting the deals. But I think one big learning was that how wrong can you go, right? With your, or probably, you know, the shorts that you have to take, it can actually be like, like go down. And the second one was the shift. I think the biggest learning there was that
00:05:28
Speaker
If you're decisive enough in that situation, which the team at that point of time was, to actually pivot the whole business and become an ad network was, I think, a learning of a lifetime. Because in August, we decided, in September, we said that
00:05:45
Speaker
August we knew that this is not going to be the thing. September we decided that we're going to be in a mobile ad network and SMS was just one part of the whole thing. Earlier plan was like that. SMS is one of the ad formats and then you actually shift to online.
00:06:03
Speaker
And in December, we were ready with the first version of the product. And the only insight was really seeing that there is a company, Admo, which Google acquired later. That was doing like 300 million ad impressions a month from India. And we were so shocked that they used to publish reports by geographies to our work, how many ad impressions are happening.
00:06:27
Speaker
We were shocked that there is already a business out there. That actually got us thinking. The whole team was very decisive. That's the pivot. This is what we are going to do. This is the timeline that we have. Immense learning out there. There's a funny story around that also. When this transition was happening, we did not have much money remaining in the company.
00:06:55
Speaker
because we had spent all of it in our previous short. They must have raised just like a small friend and family. He drowns, he drowns from mobile agents. And then we stopped drawing salaries. And Naveen came and said that we cannot give you salaries for a few months. And we said, okay, we are into it, so better be into it. And then after three months, Naveen said, we need your credit cards as well.
00:07:22
Speaker
Okay. And I said, you would like, you know, salary and then you're taking away our credit cards also. But I think, but you know, it was, it was very like a shock. And I think we got bonded so well because of that in those instances, right. And we were like all in like TKR credit card also take, we'll figure out. And it was, we knew that it was a short term thing and we will figure out something or the other. And that was, that was insane. And so, and after that, it was quite a turnaround. Like in, in the first six months of long, we actually became, uh,
00:07:52
Speaker
very big. We ended up raising a big series A at that point of time was from Kleiner Perkins and all that. And from there, the journey was like phenomenally this. I was there for three years. A lot of fun, great, great learning from zero to actually 2 billion ad impressions a month to almost a
00:08:14
Speaker
50 to 100 million dollars of top line and then say 5 member team to almost like 300-400 member team. So that actually was I think a very compressed learning time for me personally and probably that gave me the confidence to start my next venture into the financial space. So I continued to head the product piece.
00:08:36
Speaker
Okay.
The Birth and Growth of MoneySights
00:08:37
Speaker
For the buyers of inventory or the suppliers of inventory? I was on the demand side. That's what we call the buyers, the advertisers side. It's the demand side and then there is this whole network component, the pricing engine to add serving and worth to matching the inventory. It's like a very, very deep, interesting ballgame. And to build a network because it has this demand supply matching, there are no fill rates.
00:09:03
Speaker
All that. And there are tons of stories around it. So we can go on and on. I think it will take a lot of... How do you actually build a business? We were always kind of... There used to be these mobile Mondays at that point in time where people used to talk about mobile, how mobile is becoming big and all that. And we were the guys who were saying that there is a mobile ad network also which is trying to match, put ads inside mobile phones.
00:09:29
Speaker
And people used to say that there is no content, only what are you guys doing now? Where are the ads coming? Yeah, that was like the 2G era, the 3G era. But it was like VAS related at that time. And we used to always get mocked because we were building a category out in the market. We could see the opportunity, but a lot of times it happens. As a team, you are very clear about that there seems to be a very strong opportunity.
00:09:56
Speaker
And the whole world is questioning it. So it's part and parcel of a category build up at that time. So three years into Inmobi and phenomenal experience. And then that gave me the confidence that we can take our own shot at one burning problem, which has been close to our minds, which is in the financial space. And that's how we started MoneySights, which we ran for three years, which became part of Times Internet. So how did that become a V? Who is V here?
00:10:26
Speaker
So Santosh and myself have been through and through along together. No, he has been my engineering batch mate through and through journey. So we have been together for like 20 years, 16 years and so Santosh and I actually started MoneySights with probably the same vision, mission, problem statement that you can talk that we can actually, that we are today also solving at ETMoney. And yeah, so that's how the journey into the financial space, Frintech actually started.
00:10:54
Speaker
What was the vision? Like what was the thesis when you started MoneySights? So if you really look at it even today for people like you and me more retail oriented consumers, the financial life or the decision making cycle right from which products to buy.
00:11:10
Speaker
do the whole piece of how to do a transaction and post transaction of how to manage because friendship products are not like one of purchases that you can you can just buy and you use it and you're kind of instant gratification you're actually buying into a product which is for a long duration long time like.
00:11:28
Speaker
SAPs, for example, are like perennial image. So if you really look at that cycle, there are huge amount of frictions and it's leading to like a worse outcome for consumers. And that actually became, and we came from the world of technology, we came from the world of mobile and we said that we could actually apply our understanding, our deeper understanding on this to really problem solve these friction points on a continuous miss.
00:11:55
Speaker
And then there was this whole, another thing that had happened at that point in time was there was a regulatory change where the commission for the agents at that point of time, which were there in the space were cut to like one third. And which means that now there has to be a much more stronger, efficient way of actually connecting consumers to the products and online and became like a good solution to that. And I think that has been the continuous thing that how can technology
00:12:24
Speaker
help our consumers or Indians at large to fix their financial life. Like way back in 2009 is when you started MoneySights. None of these enablers were there. Even something like a payment gateway must have been a challenge to set up. So tell me about that launch journey. What were the things you needed to assemble to actually launch it off? That zero to one journey.
00:12:52
Speaker
Yeah, I think the first one was to actually first assemble the team, which is, I think everybody has to figure out a way to achieve it going. And the whole thing was that how do you actually conceptualize the whole problem statement. And there we actually drill down, created a
00:13:07
Speaker
created a very strong experience layer in terms of how today, then we fix the whole statement. Financial life is a huge problem. It is very abstract in nature when I say financial life. So we actually said that there is a part of life which we should be starting with and that was wealth. And that's how we focus sharply on mutual funds at that point in time as well. And we said that this is the best financial product for any retail consumers to start growing their savings. And then we created a full
00:13:37
Speaker
first level was to actually, you know, getting a team. One part was that because till the time we don't raise money, it becomes challenging to get the team. So we had a few people working with us on a part-time basis. We then got someone to do prototyping for us so that we
00:13:54
Speaker
we could raise money. So we did the prototype, we raised some money, and that's how... So Bloom ventures like a Karthik. I think they were also starting at that time, we were probably the second check, or first check of Bloom. And Bloom was there, then there was an angel investor Prasad, who was MD Asia Pacific for IBM at that time, and Naveen himself had invested from him. So I think we had a good bunch of very strong Gabor in that sense.
00:14:21
Speaker
And how much did you raise in that seed drum? We raised $250,000. So it was good to actually start with. And then we actually build the whole platform with the whole thing that users can come and start their journey of understanding the products well and all. But what happened was that while we had a good... Was it like commerce focused? Like users can come, compare and then buy? Yes.
00:14:47
Speaker
It was also decision-making focus that you could actually understand a mutual fund. There continues to be that battle of so many mutual funds. At that time also, it's the same companies with so many categories of products. How do we actually help people make a very clear understanding of what is a good one and what is a bad one? How did you have the mutual fund tie up? Was there a distribution broker or an agent?
00:15:16
Speaker
through whom you're making these available to consumers or did you like go and get that relationship? Yes, yes. So we had to actually do like integration with the mutual fund companies. And the good part in the mutual fund space is that there are central companies which for order processing. So all the mutual fund companies actually have, for example, CAMS as one of the companies which handles their whole order processing.
00:15:44
Speaker
and settlement and movement of units in everything, which are called the RTA's in the space. Similarly, scams and carvings. So we would actually first type with the mutual fund company and then integrate with scams. And that's how we would made, we could actually make a transaction happen online at that time.
00:16:02
Speaker
Yeah, okay, okay. And you would get that distributor commission. Then we would get the distributor commission, yes, yes, yes. And that's how it actually covers the plan. And like multiple iterations around it, I think we checkboxed all the rookie entrepreneur mistakes that you can think of.
00:16:21
Speaker
Like we were getting money when we were looking to race at that time from two people, Sequoia and India Koshan. And we said, no, we want like five weeks of that because we need out plans and all that. So I think some kind of these and then it did not materialize to the point that we wanted. Then whole point of rapidly scaling the whole thing and getting the team quickly onboarded.
00:16:45
Speaker
And we learned a lot about really ensuring that people understand the finance bit. We could get people very easily, but we underestimated the complexity in making people understand who is building the product or designing or coding.
00:17:01
Speaker
to really get them into the groove of this. So, tons of those things that we could have done better. But I think one big learning at that point of time for us was very clear that you might have a very strong team, a great product.
00:17:18
Speaker
rate sounding board would have raised more money. But if you don't have market power with you, it's just if market power in that equation is zero, then everything gets multiplied to that market power. While a lot of consumers were online, it's not like people would want online, but the whole transition of the whole market or consumers wasn't towards doing highly involved transactions.
00:17:44
Speaker
So that was one. And then we said that, why don't we actually go to, you know, and dive with people or companies who have a huge base. And that's where Time's internet came into the picture. And we said that we want you, we have this great product platform. You have a huge consumer base and we could do a strategic partnership where we start to power the content ecosystem with financial services.
00:18:08
Speaker
And that was our larger plan was to actually move into a larger space of multiple things on the financial life side. And eventually what happened was times internet actually started liking the team, the product and all that. And then the whole acquisition happened.
00:18:26
Speaker
and then it took a lot of time frankly speaking for it to happen and in between like it took like the first short was there and then we were not on page then we said that okay and during that time we had lost all this team frankly speaking in terms of running the business so I joined back in Moby so let me say that by the way I'm back and was there for two years then it was a stale company and on the side we were trying to figure out what to do with money sites
00:18:51
Speaker
But but was it still transacting? I mean, were people still transacting through it? Yes, yes. So it was it was there. We were we just kept it on the on the back burner because there was we were and it was it. It wasn't autopilot. It wasn't thriving. Yeah, it was an autopilot. We were trying to figure out what to do in that sense.
00:19:08
Speaker
And then after two years of the whole discussions and all that, Times Internet satin said that, why don't you guys come over and start and all that. So that's how I started the, I came in and then we started the whole IT money. So, and as, as part of me coming over is where Maricets also became part of Times Internet.
00:19:25
Speaker
So because the product was ready, so like the go to market for times internet became super quick. Yes. And also I think it was, it was about actually also getting a team in place, which can really 24 by seven focus on the fintech space. And, and the good part was that like we had, I had two options, frankly, speaking to go with times in here or to actually raise some money, because now after two years, the market has actually, market has actually become far better.
00:19:53
Speaker
The consumers had actually in 2014, the consumers had actually come online and a lot of things were starting to actually come back to the point that we wanted. And it was a very interesting decision.
ET Money's Innovations and Market Position
00:20:04
Speaker
And I think a lot of people could probably take cues from making those decisions as well. Eventually, I think when you're doing a startup, it all boils down to increasing the chances of success for your startup.
00:20:17
Speaker
Because when you're starting, 3 out of 100 sort of actually become like a huge, huge companies. So when you're starting, the odds are actually stacked against you. Now, how do you take that 3 to 30 to 70 to 80, 100 is how one has to look at it. And so one option was to actually raise some money, try to figure out, and then build it out. The other option was to say that, OK, what are the most important success factors?
00:20:45
Speaker
in the space. One is trust. Second one was captive audience. Third one was a long-term, what do I say, understanding that it's a long-term business. No financial services company you would have seen is built within 15, patient capital and also a longer term horizon to everything that you do.
00:21:02
Speaker
And as soon as those things were actually really fitting well with Dimes internet, we could actually go to market faster, iterate faster, with really being soup without much capital required. And the longer term horizon that, okay, it makes longer term alignment in the sense that this is not like a five year, seven year gestation. This is going to be at least a decade long short.
00:21:26
Speaker
And only then it will become so and then the end and then the another important aspect was to ensure that there is complete entrepreneurial freedom which which ensures that you are building it without any constraints or baggage of of it being content led or it being.
00:21:42
Speaker
So that actually really all these three, four things which are important for making a financial services business or FinTech business successful were actually fitting. It was better. So like in a way this is again like a zero to one moment for you, right? Because when Times Internet acquired you, you had like a basic product in place with
00:22:07
Speaker
like the connections in place in terms of customers being able to transact, but no traffic assets, right? Like not too many transactions. So then what did you do next? So we've been taking multiple shots. We started with saying that really focusing on mobile first as a very strong focus area from 2015 onwards.
00:22:31
Speaker
And we said that we continue to focus on what we understand better and where our edge is, which is where wealth orientation again from. So all the learnings we had of during money sized days brought in there, brought into eating me and that's how we actually started to build the whole thing out.
00:22:49
Speaker
You were telling me about you decided to be mobile first, like focus on mobile. That was one thing. So I think the underlying philosophy of building ET money has been more. The underlying, I think, philosophy or the problem statement still remains at large the same. For mass retail consumers, there's still the friction of whether to take
00:23:12
Speaker
fiction or around the world financial life or the journey is very, very high. And how can we make consumers make more informed decisions? And eventually when you start taking better decisions towards money, you become more confident about it, right? At the end of the day. So that's the underlying person. And then we actually started building towards this.
00:23:36
Speaker
Started with the mobile first, we saw that everybody was sporting from just to web to mobile at that time. And that actually gave us a very different angle into creating a string of innovations. When we said that, okay, if we have to impact at an India level, if we have to enable consumers to start investing, then we need to solve the onboarding problem.
00:23:59
Speaker
And how do you solve the onboarding problem? Because there is so much regulation around KYC and all that. So because we are mobile first, we could use the whole selfie feature to do a video KYC. So we were the first company in the space to actually do video KYC.
00:24:14
Speaker
And that suddenly became like, you know, and then we piped the whole, you know, you could actually start investing literally within, within 30 seconds to one minute, depending on whether you're KYC. That became like a big growth engine because then almost 70%, 70 to 80% of our users were new to investing. Before this, how did you do the KYC? Like the person would have to courier some document or like what was the process like?
00:24:38
Speaker
Yes, somebody had to actually go take the documents, verify that they are there. So in KYC, there are two components. You have to ensure that there is a proof of identity, there is a proof of address, and there is a liveliness check that the person is actually alive. So all these three checks and then the documents that are provided are actually originally seen and verified. It's called OSB. So you actually need a person out there to do the KYC.
00:25:07
Speaker
And all of this because we could true on mobile and now it has become like obviously everywhere it is like paperless. So the completely paperless transition to actually which was a very high fiction way of starting to invest and probably one of the biggest reasons that people did not actually, even if there was intent, they were not able to invest was there.
00:25:27
Speaker
And then we actually looked at how do we ensure that people are able to create SIPs faster, right? We actually launched something called as instant SIP, where you could actually set up an SIP within 30 seconds again. We were one of the first few guys to actually ride on the UPI thing to enable transactions in mutual funds on UPI. Then a recent thing came in on Adhar. So we are the first company to do Adhar-based SIPs.
00:25:56
Speaker
So I think a full focus on ensuring that we solve for the ease of transacting or was one string of innovations which actually helped us keep on growing. The other set was on the whole thing of how do we help even make better
00:26:14
Speaker
decisions. So we have a product called a report card, which helps you as consumer understand a mutual fund. And it reads like an English. It is not like dense, where people think it is very tough to actually understand. And whether a mutual fund is good or bad, you could actually understand it. The other thing that we did was that while technology can really remove the frictions,
00:26:38
Speaker
It can increase the transparency to be very, very high. And that ensures that we actually have been very clear that everything that we put out on EDM has to be backed by data. So even if it is a report card, you will see that it is so well backed by data that you believe that it's fact-based. So there is zero bias in the whole product itself.
00:27:04
Speaker
And so it's been a string of theme of products, which are around helping you make stronger and better financial decisions by simplifying. And if you really look at it, there are two or three big underlying principles. One, at a very macro level, if you look at India, there is still $1.2 trillion actually sitting in savings account and deposits.
00:27:28
Speaker
The rate at which the financial assets, for example, savings, account deposits, equity is growing at 2x the rate than physical assets, which is real estate and the likes. And that is actually which is called the financialization of assets. That's happening at a very big level.
00:27:46
Speaker
And if there is so much money that is lying, that is moving to financial assets and a huge portion of that is actually inefficient, right? Because my favorite dialogue to everyone is always about savings account is a sure shock way of losing money. Because of inflation. So your inflation is eating on a daily basis. It's not like, it's like a one year phenomenon, right?
00:28:06
Speaker
And you imagine that at an India level, such a huge amount of money is just sitting idle in one of the most inefficient places for it to grow. And if you really look at, we are a $3 trillion economy, we aim for becoming $5 trillion. One trillion is lying inefficient, right? So there is this huge impact that can be created.
00:28:25
Speaker
So that is at a very macro level. Now the other thing or principle is that consumers like retail consumers are actually in a state of or stuck in a loop of misaligned incentives. So what do I mean by that is you look at all the service providers who provide you financial products, right? Actually fall into two large categories.
00:28:48
Speaker
either that service provider is commission-led or that service provider is transaction-led. And when I say commission-led, that means that service provider is making money off commissions. And when I say transaction-led, that business is making money by charging you per transaction.
00:29:08
Speaker
If you like to hear stories of founders, then we have tons of great stories from entrepreneurs who have built billion dollar businesses. Just search for the founder thesis podcast on any audio streaming app like Spotify, Ghana, Apple Podcasts and subscribe to the show.
00:29:29
Speaker
What is an example of this transaction lit? Like brokers, for example. When you're doing a transaction or doing trading, for example, you are charged on per transaction. And in mutual funds, a lot of people and regular mutual funds are there. So we said that if you really look at it, both these approaches
00:29:52
Speaker
are actually not really bothered about what is your financial outcome. They're not aligned, right? So a commission-led player will always keep on selling you products which have higher commission. And everything said and done, the business optimizes for revenue maximization. And at scale, you cannot really stay away and say that, nah, I'll be great to you, but I will make less money. I think it's a false alarm for consumers.
00:30:15
Speaker
And then the transaction-led ecosystem also does the same, right? Because it will keep on the whole ecosystem, actually drives you to make more and more purchases. Because if you do more purchases, more buy and sell, more buy and sell, more buy and sell, then you actually make more. And in this, again, whether or whether a transaction is profitable or not, it's not really nobody's caring for it.
00:30:35
Speaker
Whether you are reaching your goals, nobody is caring for you. So I think there is this whole ecosystem which is not really aligned to consumer outcomes. I think that's a huge issue. And when that happens, and that is the biggest reason I think the breeding ground of mistress that we keep, every fintech company or every company wants to say is that we want to solve for trust because there is so much mistress.
00:30:56
Speaker
I think the reason for that mistrust is the ecosystem, the way it is approaching the consumers. So we said that there could be a third way to actually create a much more impactful business by aligning ourselves deeply to consumers.
00:31:12
Speaker
So we said that in mutual funds, for example, we don't take commissions. We offered products which are direct plans, magic plans. So as a consumer, you earn 1% higher returns. So imagine that the commission that was going to an agent that is getting added to your returns, right? It's like that. And that gives you higher returns by its very design, simple. You don't do anything. Just convert your regular mutual funds to direct. You are actually 1%.
00:31:38
Speaker
And then it compounds like a huge sum on a yearly basis. And then we also don't charge for transactions. So it's a completely free platform. But you're not doing equity, right? But the transaction is only for equity. Vietnam.
00:31:54
Speaker
No, no. So even for mutual fund transactions, right? So you can come on e-money, decide which mutual funds to buy and do the transaction and manage the whole lifecycle rate. So that's one large. So we disrupted the whole commission-led ecosystem in the mutual fund space. The confidence that we've got is from the consumer love that we've got, right? Which is because we took that hard call and aligned ourselves to consumers. What it does, it makes us completely unbiased, right, as a platform.
00:32:23
Speaker
I don't like we never push you to buy me to find a specific because it's it doesn't make me money why would i would i know as a money company we are always so geared towards giving you the right solution which is completely unbiased so that's that actually brings in that's all for the problem head
The Philosophy Behind ET Money's Consumer Trust
00:32:41
Speaker
off.
00:32:41
Speaker
And if you really look at it, has it worked? At least from the numbers that we've got up till now. It clearly showcases that this is working. For a simple fact that for today we drive close to 600 crores of new investments, mutual fund investments every single month from the app. So that's close to a billion dollars of new investments happening from one single app. We help consumers actually manage 3 billion dollars of their old investments from the whole
00:33:09
Speaker
We were the fastest company to reach 10 lakh SIPs a month, which leads to close to 250 crores of SIP every single month. Now, while these numbers are great, we are proud of it and all that. But for us, what it signifies is that people trust us with that much money.
00:33:30
Speaker
Right. That means we have, we've got the, we nailed the problem of at least trust in this, in the space by ensuring that we are providing that kind of experience, which is completely unbiased. And, and I think, so, so that's this one piece that actually, then we added, you know, more products, which are like envy.
00:33:45
Speaker
When did you pivot to direct plan? So that was in 2018. And how are you monetizing? How are you making money to meet expenses? Yeah. So we started with mutual funds. Then we actually have been iterating around other products which are part of your financial life, which is insurance and lending. So we have been iterating around that. Those two products we don't promote outside.
00:34:12
Speaker
but they are actually part of the solutioning itself. And we make money off of them at this point in time, which is which is a cross-selling business.
00:34:19
Speaker
So mutual fund is like a customer acquisition tool essentially. You get the customer in by offering a direct plan. You don't make money there. But once the customer is in the ecosystem, then there are other opportunities to serve his needs. And the great thing about being wealth first as a company is cashbacks are not allowed.
00:34:42
Speaker
So I cannot give you money to actually invest. That's like, I think the best thing that has happened because otherwise what has happened to people who have been giving cashbacks, right? And so literally what does that mean is if the users aren't incentivized to use the platform, they have to see real value, right? And if that means whatever products we have put out on the table for the consumers are actually working,
00:35:07
Speaker
for a simple reason that they're finding a lot of value. So I think it's the second thing that a wealth first business does is it automatically has a good trading credit of high quality. So people who invest are actually people who have saved money and they have money and that's why they are actually saved. So it's not like you're going to people who don't have money and then giving them money, which is lending, which is a different ballgame order. So here you're actually having a very strong audience, which is actually high quality.
00:35:36
Speaker
The third thing that it does and has done for us is there is a huge retention that we have been able to get for our consumers. So people who have transacted on 80 money once, their yearly retention is at 94%. So I know that once the user is there, that user is going to be with us for a long duration, for a very, very long time.
00:35:57
Speaker
If you do the math, then it is almost like 10 years because nearly only 10% of the users are going. So over only 10 years, all the users will be all right. So I think that I think is a huge, huge advantage. And once we know that there is, the consumers are coming high quality and they are high quality and they're retaining.
00:36:16
Speaker
we can actually then go into the journey of solving their other aspects, which is what are the needs. So, like our whole build up has been more audience-led, I would say, than then, so to say, a shiny, doi-based, think you charge lending, children, lending, like other thing. So, or today now, new banking is the new, new big thing. Can we actually attach new banking? So I think it's more about what the consumers are guiding us to build.
00:36:43
Speaker
Like when we are iterating around insurance, we are not making insurance like a typical set. What we identified is that a segmented approach to insurance is much better than actually a direct sale. It actually focuses the whole effort to say that based on your profile, these are the set of insurers that make the best sense for you and this is how the whole journey starts. So it becomes more and more customized.
00:37:11
Speaker
you're able to do a personalized recommendation after understanding the user. Correct. And then similarly in lending, we found that a lot of users were actually three out of 10, three out of 12 times in a year, right? With three months out of 12. There was a gap in terms of having money in the last week. So which means that we need to not have personal loans strapped into it, but actually having a solution like
00:37:37
Speaker
a credit line or an early salary. Or for that matter, can we actually give, how do we enable a user to actually have very small ticket sized loans, which can be given back very, very fast. And to actually keep on doing that multiple times is very painful, right? Like, and you go for taking a loan, it's like an exam. Yeah. So we actually then said that, okay, we know, we understand the profile, we give a line of credit.
00:38:03
Speaker
which line of credit is where you can just dip into whenever you want a 3000 loan to a 5 lakh loan, you can actually take and pay back whenever, the way you want it, it will be there. So it became like, so the larger point that I'm driving is that all these are iterations, experiments that we are doing and all that, but it's more what our audience are actually need, it's more audience driven than market type driven. And that has served us well.
00:38:30
Speaker
And now the journey for the future is more exciting now because we have this huge consumer base. We have people who love us and are retaining and transacting regularly on our platform. We have solved for a lot of problems on the website. The transition is now about saying that what is the future landscape or future that is happening and that is going to happen.
Consumer Attitudes Post-COVID and Organic Growth
00:38:56
Speaker
And if you really look at it, the whole part is around
00:39:00
Speaker
Like transaction is the whole thing around doing transactions or enabling transactions is like becomes a commodity over a period of time. The way you would do a transaction on say a Flipkart versus Amazon is more or less the same. But the real value for the consumer is always about what happens before which is helping the consumer decision. The second is about post transaction. How do you actually manage?
00:39:25
Speaker
And we actually deep dive during the whole understanding or understanding the consumers to where what are the next next level of problems that the consumers are actually and and that consumer deep dive actually through like really amazing insights.
00:39:40
Speaker
One was that I think the whole COVID piece and lockdown actually has a huge impact on how people look at money. So what we found is that COVID really forced people to look at their own lives in a very different manner. Like I want to live a life differently because there is no certainty of what can happen. Like I could die anytime, so might as well. So there is this whole self-realization that has become huge in the segment.
00:40:06
Speaker
And when you want to live life on your own terms, the number one question that you ask yourself is, do I have enough money? So we are seeing consumers, you know, going away from that fixed mindset. I want to just do like study, get married, buy a car, house, and then retire. And all that is actually thrown out of the window now.
00:40:26
Speaker
There is this amazing sexiness about disproportionate rewards, like retiring at 30 and saying that retiring at 30, not owning assets, which actually curtails my freedom. So people are preferred.
00:40:42
Speaker
preferring renting, even if they can afford a house, a buying a house, right? Like people are preferring to go on travel experiences more than actually saying that I want to own anything. So I think there is this whole change in terms of how the whole thing and in this whole
00:40:57
Speaker
change, there is this evolving mindset which is what is actually triggering and making money center stage. Because money is being looked at as an enabler for those aspirations. If I don't really think about it now, five years hence I cannot retire. It's not possible only. It's impossible.
00:41:19
Speaker
suddenly money has become so center stage right into our decision making and this which is great and that's why you see like there is so much inflow of consumers inflow of retail investors to wealth creation wealth space right and this is like a permanent behavioral shift right because once you have
00:41:38
Speaker
It's like that, right? It is happening. And that's why you see so many people coming and investing. So I think that's a huge, huge change that is there. But if you really
00:41:52
Speaker
leading to
00:42:22
Speaker
green actually lightened up. It actually leads to a very big problem, which is about how do you then manage, right? Because addition of one product into your bouquet doesn't actually increase the complexity linearly, right? And one product versus two product versus three products actually become like, it's an exponential, it increases your cost of managing really, really large. Cost of managing is one. And when I say cost of managing, it's more complexity, right? That how do you now actually kind of, like what that leads to is then a state of full confusion.
00:42:52
Speaker
Like if you have so many, like a simple question of, I have more money, where should I put now? Should it be this stock that we should fund or how do you do that? There's this confusion, right? If you have to remove money, where should you remove money from? Like the market is up, should I be doing something up to my portfolio? The market is down, should I be doing something? So like this state of confusion is also rapidly increasing with the inflow of users and as more and more products are being bought.
00:43:16
Speaker
What's your customer acquisition strategy? What does your funnel look like? How has that evolved over the years? So when you started off in like 15, 16, at that time, what kind of monthly customers were you acquiring? Was it by virtue of times of India's news websites? Were they the main drivers of traffic? Tell me about that.
00:43:38
Speaker
Yeah. I think first two years, it has been largely times internet led and, and, and actually also because the product experience, the reliability of it, the unbiasedness of it, the whole proposition of direct plans, right? Actually ensure that we have a much more stronger word of mouth.
00:43:56
Speaker
And that is continued to be very strong because we perceive to be a much more stronger brand in the space. The product experience ensures there is... See, trust is also about not having surprises during the experience, right? Like reliability of it becomes like that.
00:44:11
Speaker
that is ensured that our customer acquisition is, has been always more organic. So if I do a cut off our customer, customers acquired through organic channels, which is not big channels versus big channels, it has continued to be 70, 30. So 70% of the users are actually getting acquired via either word of mouth or reference. So one user referring other and, and that's, and, and the thing is that in all this,
00:44:37
Speaker
You cannot incentivize the user, right? So there is no way to actually kickstart till the time you continue to provide like deep value. And that ensures like our cost of overall blended cost of acquisitions are much lower, right? So something like like say if like in the newspaper, the Times of India newspaper, if there is an ET money promo in that, that goes into your organic channel or your paid channel? It goes into a paid channel.
00:45:02
Speaker
There's no free ads. There are no free lunches. So I think it's also from the way to look at that is that Times Internet and the whole ecosystem is still one of the channels. And for Times Internet also to promote ET money at a lower cost versus actually looking at other options of other advertisers.
00:45:28
Speaker
There is this understanding that it has to be at a price, at a market rate, because otherwise, times it is losing in that sense. So I think there is this clear understanding of keeping it at market rates. And the good second order effect of that is that we really build an independent company.
00:45:48
Speaker
Like what happens tomorrow if we are not able to use the media, right? Suddenly that becomes like a big challenge, right? So I think, and that actually made us really think hard or build like crazy amount of growth stack, like our, probably our growth stack in terms of driving users right from once they install the app to sign up to doing the ban check, KYC and everything is, is I think,
00:46:12
Speaker
one of the best in the space or probably in India. There are 40 to 50 individual journeys that get triggered once the user comes in. So, for example, when you, as Akshayas, come in, based on where you are, what kind of information that we have about you or the system has about you, and what are the possible interactions it's doing, it keeps on giving you a completely personalized way of moving you down the funnel or moving you to the next step.
00:46:42
Speaker
Like you try and predict what product will interest me, whether I would want to do research first. Multiple things like one is that if we know that there's an intent to actually say invest in a mutual fund and you've shown an interest in actually looking at a certain type of mutual funds, then the home feed that you see on the app is personalized with that intent. So that's where the first layer of our whole focus on personalization started to come in.
00:47:11
Speaker
So what does the app look like? What do you mean by a feed here? I thought an investment app would straight away show you a dashboard and what is the value. So I don't know. You have to go there. So what it does, it actually first gives you a dashboard of where you have invested into what products and what is the profit loss and the worth of value.
00:47:31
Speaker
then it gives you a set of gods which are hyper-personalized to you as Akshay. If you're looking to actually understand more about Vicha funds, you will see a video which there is this another loan initiative that we have, which helps you actually get better at investing. Our YouTube channel, for example, being a brand, has close to 300,000 subscribers, 3 lakh subscribers, and that is on the back of
00:47:58
Speaker
not doing any sensational stuff. There is no news. There is no stocks. We don't talk about stocks. We don't talk about IVOs. We don't talk about teams. So imagine that all the clickbait that is possible that we are actually revolve. And I think it works because we understand our audience really well. We understand that the audience wants to learn about investing, how to make those smarter decisions.
00:48:26
Speaker
And, and then we, because that has a, what do I say? The action can also be taken from the app itself. It just bridges the gap from, okay, okay. I understood this. Now I can actually implement it there. So the whole journey of, of, of realizing or working or learning to actually implementation is like really short circuit rate. And that gives you a very big high because you could implement it right immediately.
00:48:50
Speaker
And the other underlying principle has been that we'll not do anything, which is not really helping people take that informed decision. Like smarter decisions has to be a core philosophy into creating that content. And that actually has helped. So now that content becomes whatever we have, that engine becomes part of your personalized suite.
00:49:08
Speaker
Okay. And that could be like a report on a mutual fund, a video, a blog or an article on how to learn something or even an offer for a loan or like products also could be part of those cards.
00:49:24
Speaker
products could be, yes, product could be part of it. But I think it's a function of, like, the whole challenge is, if we actually push you products, right, then we know for a fact that doesn't work. Like, if we are after you to buy insurance, it doesn't work. Like, that we tested out and our test query. So it's a very, till the time it is not personalized, you're not going to interact with the feed, right? It's like, you're used to actually interacting with the feed of cards or feed when it is super personalized, right?
00:49:53
Speaker
And it actually solves the intent that you have come to the act with. If you're not come with the intent of buying insurance, even if I show you like the first block, you will not go for it. And it's a negative experience. It's a waste of energies, waste of, I think, a very important moment for us on the system that the user has. Like every minute that the time is spent has to be moving towards making
00:50:15
Speaker
So most of the feed is content then, like 80, 90% would be content. Content is there, then insights are there about your portfolio, right? The third thing is about the insights, like what is going wrong? We launched a product called Portfolio Health. So what you could do is you could import all your venture fund investments that you've done till now since 1990s and see how they have performed and first see them on one single screen and then you compare their performance insights and
ET Money's Product Offerings and User Engagement
00:50:45
Speaker
all that.
00:50:45
Speaker
Now, if there is anything wrong that is growing with your portfolio, the portfolio health as a product highlights those problems that are you over invested in say small cap stocks, underlying stocks, right? So if you have like 100 rupees or 1 lakh rupees into five retail funds and you have like a huge portion of small caps, then you need to actually do something about it because the huge amount of risk is sitting on it.
00:51:10
Speaker
So it actually gives you a lot of these insights, which again are very exciting, not to be found anywhere. And that engages the user, solves there and makes them more smarter on making decisions about this. Do you get user data from other times apps? Like if I'm using economic times,
00:51:33
Speaker
Will that help you personalize your app more? First is we can't get data for a simple reason of data privacy because I think that we have stayed very clear and ensured that neither do we share data in that sense. Because I think A, there is data privacy that is important.
00:51:55
Speaker
And when it comes to money related data specifically, it's all the more important, right? So I think we have stayed away from, from creating a layer of data exchange between so, and it actually kind of works pretty well because I think the whole data set actually is getting utilized in that, in the, in the right context at all points.
00:52:15
Speaker
I think at the moment it becomes like federated also everywhere, then the like, I think the problem around data has always been about, can you actually really use it for the, for providing any end utility to the consumers? Unfortunately, most of the data that people actually want is to sell you something, right? Kia ora chai, know your least five things, then you are a very high probabilities buyer of this product.
00:52:38
Speaker
But I think that is a very limited utility of data, like the real utility of data is to actually kind of actually give you a positive outcome from the data that you're providing. I think it's more, we are more geared towards that than, than actually kind of thing. And then because of our, our product of portfolio analysis and health, right, where you could import the portfolio.
00:52:58
Speaker
a lot of users actually also bring their portfolios on the 80-minute app. What does that mean? Bring the portfolio or import it? What does that mean? Does it mean that you are now the intermediary through which they can sell it? Is that what it means? Yes and no. You have to do something about it. Some process is there so that it becomes part of our AUM or
00:53:22
Speaker
Like there's some migration, like if I bought it. There is a migration. Yes, there is a code migration that you have to do and then it actually will be counted in half. But what it does, it actually, to the end consumer, it is a huge advantage, right? Like you can bring, a lot of people have invested in mutual funds in like, like five years ago, when the whole tax season comes, everybody starts to, I know all the, everybody will come in and say in all that, right?
00:53:48
Speaker
or put in this one, that one. And that person is then managed. So the product managed, right? And then now you don't know what has happened to that. But the good part or surprising part of her or pleasantly surprising aspect of her product is that you get to suddenly see the lost money. It's like that dollar, that money that you're not seen in suddenly visible, right? Can you like enter your pan or other or something and then therefore see what all investors? Yes.
00:54:15
Speaker
So we have the beauty there is that you don't have to actually manually input anything. You just kind of log in and we have done integrations to ensure that your portfolio can be bought, can be imported and brought to ED money seamlessly with your consent.
00:54:38
Speaker
and it triggers a report, the report actually has everything and then that report you can actually forward it or upload it and it actually clicks in everything for today.
00:54:47
Speaker
So I think there is this whole personalization piece that I was talking about. Now that does multiple things. That actually engages the user, ensures that users are actually moving into the funnel also. And that actually has created a huge impact in terms of our business because our signup to a user transacting ratio is like 2 to 3x of the competition.
00:55:13
Speaker
And, and ours, our transaction to repeat transaction ratio, that is also two to three eggs. Like when I say retention, like almost 45 to 50% of our transacting base actually transacts every month. Okay. Highly engaged. So it's engaged and these engagements are not like low value of frivolous engagements, right? Which is like watching a video.
00:55:37
Speaker
Like I'm not just watching a video, which is of these are like real transactions being done about growing your money. And these are not like small transactions, like not a 10 rupee kind of transaction or 15. These are transactions in thousands, right? And the other, other impact that it had on our, has on our business is that every year, the average ticket of the investment is actually rising. So I think there are like multiples second, third, fourth order benefits.
00:56:03
Speaker
And that makes the whole business also much more efficient and more scalable. And that can only become when you're solving a lot of consumer restrictions. What is the current average ticket size, investment average ticket size? It's 22,000 right now. So on an average rate. It's pretty good.
00:56:25
Speaker
Yeah, it is. And in a year, a user invests anywhere between 1.2 to 1.4 lakhs. And once you've started your journey, then you will keep on continuing rates. So our average UMS has grown significantly also per user. So from a business perspective, we have this amazing set of things that have come together. There is an external turbo engine that is tailwind in the market.
00:56:54
Speaker
And because of our product capabilities, we are actually able to ride on that. Like if we actually started building right now, then we would have not. But because that underlying principles that we need to focus on consumer outcomes, focus on providing unbiased advice, that is actually helping us to ride on that way.
00:57:11
Speaker
So what is your path to profitability? Currently, how much of your transactions happen which are monetizable, which means that insurance or lending? And how much time do you think it'll need? And what is the roadmap there? Sure. So firstly, what is happening is that at least our marketing is the marketing money that we invest is actually paid for by the insurance and lending business.
00:57:40
Speaker
So it's like a very simple economics out there that if we make enough money, we can actually invest enough money. So it's like that. So like our marketing budget is decided by our revenue. That's like an internal call you've taken to ensure discipline that you don't expect what you make on marketing.
00:58:01
Speaker
And we're not compromising on our growth targets. So I'm not saying that. But I think the future is about, as I said, the future is about moving beyond transactions. We launched a product called Genius last week, 9th of February. It's a subscription, it's a membership which actually gives you access to very strong investing strategies.
00:58:26
Speaker
which are personalized to you. Like direct equity or mutual fund? So there are a few things that we actually learned during our journey, right? As we said that, okay, we have to move towards making consumers smarter and actually helping them take right decisions. And so I remember I was talking about this whole problem of you have so many products, state of confusion, right? And that state of confusion leading to like wrong actions or no action.
00:58:52
Speaker
In that what we realized is that one big gap in the space is about there is zero personalization, right? Like a mutual fund that you are buying is exactly the same mutual fund that anybody else is buying. And when it is not personalized, what happens is you end up actually getting confused more. Like if the market goes up or the value of that investment goes up and it is not personalized to your risk appetite, you will actually take a wrong call.
00:59:18
Speaker
So what GS does is it actually first understands, helps you understand your own personality, which is why I invest in, which is why I invest in personality test, assessment tests that yield on. Like risk appetite and duration and stuff like that. It's like that. But there also, I think the usual way has been that we ask, people ask you like three, four questions. Right. And based on what is your mood, you become an aggressive guy or you become a conservative guy.
00:59:45
Speaker
and imagine that your recommendation is based on those four or five questions. We said that if the recommendation of where you should be investing and how much is dependent on such an important aspect of a personality, we actually work with a company called Centonic which is based out of UK, which is a specialist in behavioral finance.
01:00:06
Speaker
So, they have a lot of models which actually predict with high amount of accuracy what kind of person are you, what is and there are three components to it that what is your aversion to loss or how much loss can you bear, what is your level of confidence in your decisions that you make when it comes to money.
01:00:23
Speaker
What is the financial understanding that you have? Now basis these three aspects it gives you a risk score and then it actually says that okay and there is a range to it that a risk score is not like one number because you as a person are not one number like based on your situations you can you'll be acting very differently with you.
01:00:40
Speaker
And then it recommends that as Akshay, if you are a strategist, which you are open to actually do research and then you actually take decisions in life, it recommends you an investing strategy which is personalized. And it factors in the time horizon in that. So how much?
01:01:00
Speaker
It actually recommends your investing strategy which gives you a percentage that you should be investing in equity, in domestic equity, in international equity, how much in debt and how much in gold, which is called asset allocation. Now, the big insight around asset allocation is that if you really look at your investment, people are chasing
01:01:21
Speaker
or something, maybe life change company. Like literally that's what, it's a greed or homo or whatever you call it. The disproportionate rewards that I talked about, right? People actually want like, Pasar Dala or Taniq Sogar. There's this whole chase, right? People are having. But imagine in your portfolio,
01:01:37
Speaker
if a stock has grown by 10x and if it is just 1% of your overall investment, even if it runs 20x, you're not going to actually make any needle moving impact.
01:01:55
Speaker
with the investing principle is that if you had 60% of your money in equities, you would make far, far more money than that multi-bagger. Because your percentage of your portfolio into equities decides your returns. And that's the principle behind asset allocation. And this is what I think world over the best of the investors in the world have always asset allocated and created more money.
01:02:22
Speaker
So, do you actually execute also or do you just give a report saying that this is your allocation that we recommend? No, no. We execute also. Absolutely. Like, so we give you a recommendation. If you're saying equity, then do you pick the equities also? Yes.
01:02:37
Speaker
So it gives you strategies that, okay, if you're a strategist, you have a horizon of 10 years, right? Or you can bear more volatility or more risk, then high growth is your strategy, recommended strategy. Inside that, you should be, say, 80% in equities, 10% in debt, and 10% in gold, for example.
01:02:56
Speaker
Inside that, you have two ways to execute that strategy. One is via mutual funds and one is via stocks and ETFs. So inside equities or inside in mutual funds, you will have all these equity debt and gold represented into by index funds.
01:03:15
Speaker
So we don't actually do active vanish funds, index funds. That actually goes cost and insight. And inside and in mutual fund, we go one step ahead and tell you how much in large cap, mid cap and small cap. And that is also index based. So it's more blow down. So you get a very well-diversified portfolio. That is one outcome.
01:03:33
Speaker
And again, you will also recommend in large-cap this, in mid-cap, this fund. Yes, yes. Exact fund. I'm saying, Casey, the problem with the whole world around all these advice is that, as you rightly pointed out, it's not implementable. If I give you all the GAN around asset allocation, can you actually do it? No, not at all. Yes, you're not, right?
01:03:55
Speaker
So there has to be a system where that's what actually genius simplifies. It gives you an asset allocation, which has traditionally never been available to retail consumers like you had, right? And that is the power of technology that it brings in. Then it recommends you how much you should be investing, in which fund, in which stocks. Stocks made actually tells you top-hit stocks also of the investments there, and in what proportion that you should be investing. What is the cost of this subscription? So the membership actually costs you 249 rupees a month.
01:04:23
Speaker
Which is extremely reasonable. Which is extremely reasonable. And the second thing that it does is that today you can be in the perfect allocation. Basis the market. But what if the market signals have changed? What do you do then? It gives you monthly rebalancing and that is a simple 3DAP experience. So the system, so Genius is actually understanding the global markets. We have integrated with close to 11 data vendors across the globe to actually understand what is happening.
01:04:53
Speaker
Is the market or how is the price movement in the market? What are the interest scenarios? What is the multiple multiple factors that actually and then recommends you so every month you get a rebalancing option which you can tap and get to your best allocation and that's why it is like a continuous exercise.
01:05:11
Speaker
The underlying principle is what I think the best of the investors do. Like Warren Buffet's two rules of investing has always been that you never lose money. And the second rule is to never forget the rule number one. I hadn't heard this but this is amazing.
01:05:28
Speaker
Okay, so genius is geared towards actually ensuring that it keeps on minimizing risk versus actually a principle which says that keeps on maximizing returns. So the idea is that if you minimize risk your returns will obviously be higher.
The Launch of Genius and Future Revenue Goals
01:05:45
Speaker
Is this also what's called a robot visor? In the U.S., there are these robot visors through which you can invest? Yes, yes, yes. In a way, yes, definitely. It's very, very close to that, right? So there is Acorns, which has this similar kind of service, and well simple in the western.
01:06:03
Speaker
like tons of services which have scaled to like a multi-million dollar opportunities. But I think this is what the second thing that it does, it actually understands how you need to keep on rebalancing and then keeps on reducing risk as you move forward and increasing the returns.
01:06:21
Speaker
And the last part is that with our backtest of this whole strategy, it is proven to actually give you close to 1.8x higher returns, close to an 80% higher returns over various periods of time and then the benchmark and also protected you additionally by 40% when the market is deeply corrected. So I think it actually fits into the
01:06:46
Speaker
whole consumer segment, which has a lot of products, who is confused about what to do about it. And it actually is not like something that cares you. It's not a black box, like you just invest and it goes away and then what is going to happen. It's not like not putting money on autopilot. It involves you, but makes you feel that is the right thing for me to do and gives you that confidence.
01:07:08
Speaker
So yeah, we have launched like only on 9Fib, so it's been a good one. So this is like a pretty big bet on the path to profitability, right? Like this could... Yes. Because it is priced in that way where it would have a more bass appeal. Yes, yes. And remember the principle that I talked about, that the whole ecosystem is geared towards not aligned to you, right? Now, in this 249, we are not charging you for transactions, right?
01:07:38
Speaker
We're not taking any commissions because underlying products are there. You have unlimited access to those strategies. You have unlimited transactions that you can do. There is no cap on investment amount. You have no incentive to recommend A over B because of some commission or any such thing.
01:07:56
Speaker
We said that we need to remove this from our way of building the business itself. The moment you actually take that sense and the beauty is that now everybody in Iti Money is geared towards really delivering those. That's our now business water drive. So it's completely aligning.
01:08:11
Speaker
And obviously, it also has to actually deliver value, which is beyond transactions. So it actually goes into what we believe is going to the future, aligns ourselves completely to the consumers from a strategy point of view. And the third thing that it does, it gives us a very unique position in the landscape. So that's definitely a big way. When did this go live? 9th of February.
01:08:36
Speaker
Like last week. And what kind of traction are you seeing? So on the first day, we saw a subscription getting bought or a membership getting bought every five seconds. And I think it seems like while it's too early, like it seems like a very good fit to the audience that we are chasing, which is not like a very, very early or low income.
01:08:57
Speaker
Absolutely fitting. Our sense is that there are at least 5 billion, those set of users in this, in the market who have this burning problem. We need to figure out a way to, and we also have a huge phase, right? Which can quickly upgrade. So I think it's, it's worked out. It's too early, but the science are like super encouraging.
01:09:16
Speaker
Yeah. Is there any other company which is doing this like a robot advisory in India? Not really. Like the way probably, probably the way we are actually built it. In fact, we over a period of time realized that there is no precedence in, in either the Indian market for this product or even, or even the whole dynamic asset allocation model that we have in the world. It was very kind of like, like it keeps on changing your asset allocation based on market signals every month, like all the asset
01:09:45
Speaker
all the other, you know, advisories have been putting you into a fixed number that 60, then 60% of the equity will continue for like another five years. So the, the whole dynamic thing is, and that gets rebundled, bundled with rebalancing becomes like, and the third component of it being hyper personalized, right?
01:10:03
Speaker
It's geared towards Akshay only. Like Akshay's investing strategy, even if, even if say, you know, Stuti gets it, then the investing strategy could be the same, but the proportions in each of them of equity will be different. I think these three pillars are there, which are actually probably getting the node with the audience. So like by 2025, what kind of revenue do you see ET money doing?
01:10:27
Speaker
By revenue, I mean not like the asset investment of the direct plan, but like what you would be earning. We are gunning for close to 600 crores of revenue by 2025. And I think it's not my personal stretch target. So I think we can get there.
01:10:44
Speaker
And what will be the split of this? How much from genius membership sales? How much from insurance? How much from lending? These are the three sources of revenue, like insurance lending and genius. It has to be primarily genius. So I think, and there is a clean shot at it for us from where we see today. It's a unique space. Nobody has gone for it. We have a huge base. We will double down increasingly. That would be like how many genius members would you be estimated by 2025? Close to 2 million.
01:11:11
Speaker
So, and that seems like a possibility. Obviously, it will need those kind of investments as well. And I think at a cumulative number, if we can hit that, I think we are all. Yeah. Broadly, I think anyone earning more than a lack a month is a potential genius target, right? Yes.
01:11:32
Speaker
And also one of the experiments that we are running is that are new to investing users, also going for a genius. And surprisingly, it's like a lot of people, because they do a lot of research, are actually understanding that this is a great way to also start, not like really kind of way.
01:11:50
Speaker
So I think if it becomes like a great way to actually even start your first dollar or first a thousand rupees into investing, that would be like a great, great unlock for the consumers also and for us as well. Genius would also be relevant for like the tax saving. There is that whole audience which comes in in barge to invest so that they save tax. Yes, absolutely.
01:12:17
Speaker
In tax saving, you have limited options, right? Or would you then, within those options, figure out what is the best asset allocation? Eventually, we will figure out, for sure, because that's one big area that happens, that everybody starts their investing journey with taxation. But what we realized is that while there is this whole phase of actually saving taxes, which is there, but if the investing strategy has to be taxed,
01:12:45
Speaker
optimized as well to ensure that you have. This is the first big step that we have taken and Genius will continue to evolve into rapid value additions over a period of next 12 to 24 months. A lot is there to come.
01:13:01
Speaker
So if I have five lakhs to address, the genius will ensure that the tax optimization happens in terms of that one and a half going towards tax saving instruments. Yes. That's the evolution. We don't provide it today, but that's the most logical evolution that we can. The only challenge is that if you have tax saving, say, for example, mutual fund, then they are logged in for three years.
01:13:26
Speaker
Yeah. So, so we need to actually figure that out. But I think, but then if, if they, if some component of it is actually, and the second part is there is no index point around it's right. So, so that is another thing. So I think both the things have to evolve from a, from a ecosystem perspective to have tax, but it's a, it's a, it's a great point actually.
01:13:47
Speaker
So while there is no competitor in terms of paid subscription based robot visor, but then there are these robot visors which are offering investment where they make a commission like they deserve and they stack money, like these like wealth management apps where they have a similar goal
01:14:04
Speaker
So you are taking one call that, okay, we'll invest your money into direct plans, but we'll charge you a fixed subscription. And then they're taking a call that customers may not pay a fixed subscription. So what's your view on which of these theses will play out in what way?
01:14:23
Speaker
I think it's actually it's very early, like there are multiple ways to solve at it. Our reason, I can comment about our reasoning behind it, right? Is to say that if I'm commission-led, then it's tough to be unbiased. It's not tough, it's just impossible because at some point in time you asked about 600 crores, right? What is the, if I have to earn like 500 crores, I have to maximize my revenue, what will I do? I will say, okay, this is the product which gives me higher commission, that should be part of my recommendation, right? So I think it becomes,
01:14:53
Speaker
kind of challenging at scale to be unbiased if you are commission-led or purely transaction-led, I think. If you like the Found a Thesis podcast, then do check out our other shows on subjects like marketing, technology, career advice, books, and drama. Visit the podium.in for a complete list of all our shows.
01:15:23
Speaker
Before we end the episode, I want to share a bit about my journey as a podcaster. I started podcasting in 2020 and in the last two years, I've had the opportunity to interview more than 250 founders who are shaping India's future across sectors.
01:15:39
Speaker
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01:16:00
Speaker
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