ETMONEY went direct last year. How has been the response from investors?
We have been growing 30%+ month on month since then and have emerged as one of the fastest companies to cross Rs.2,500 crore of AUM in mutual fund investments. We are on our way to double this number by the end of this year. The number of new SIPs that we are now driving is ahead of every online player and also ahead of large traditional bank distributors or brokers or platforms. We have been able to not only grow but retain consumers & assets on the platform, even after heavy market volatility.
What was the idea behind having a mobile focussed platform instead of a web based service?
When we entered 2.5yrs ago, there was no one building mobile-first investing solution. All big players were on web and porting their product to mobile, which we knew never works. We could see a clear white-space in going mobile-first.
Secondly and more importantly, mobile gave us opportunities to innovate more rapidly across the investing journey for the user. For example, we were the first company to do full online KYC using the video capabilities of mobile. We still get 60%+ of our users who are new to the industry (Non-KYC) and hence we are proud to do our bit in improving mutual fund penetration in India. We have introduced a slew of features like instant withdrawal, SIP registration without first installment and the option to Skip SIP installments with a single tap. Last week, we pioneered Instant-SIP setup which removes the long (upto 28 days) physical process of downloading, scanning and emailing the ECS mandate to setup SIP. Instant-SIP setup takes less than 30 seconds and is completely online. We believe this can change the way SIPs are setup in India.
Thirdly, we have been clear that eventually the real value users will get is through personalization i.e. enabling users to find the most suitable fund given her risk profile and reach their financial goals. Mobile enables 10x better personalization & more importantly at big scale.
How do you get investors to download your app? What is your customer acquisition strategy?
No incentivization or cashback in any form is the biggest advantage of this category. It boils down to “what real value you give to the users so that they come to you & only you.” A combination of a paperless, on-demand experience, personalization and user’s trust has helped us get 64% of investors organically i.e. through word of mouth. This helps us to keep the cost of acquiring users to be super low and enables us to invest in better customer experience and support, which in turn feeds more word of mouth. That’s our simple and efficient customer acquisition and satisfaction loop.
The second order advantage of such a strategy is that it helps us provide the real benefit of technology-led low cost advantage to our users. For example - enabling them to invest in direct plans and earn higher returns than regular mutual funds every year. I don’t think other players in the market have such low cost and hence there are sustainability issues for them, not for us.
Investing is a complex process. How do you guide investors on choosing suitable products online by themselves?
Investing is perceived to be complex because there is no simplification, transparency and trust. We are changing that by solving the entire journey from decision to purchase to management using data and simplification.
We built industry’s only mutual fund report card for every fund in the country, which is in plain, understandable English. We analyze 2,000+ funds daily to create this report that helps users understand the performance, risk of the fund easily. The clear jargon-free, data led approach solves for transparency in a big way and makes the user confident.
We also help consumers to choose a portfolio of funds, which has proven good performance and matches risk. This helps users to skip the individual fund research and directly invest in a bouquet of best funds. The money to be invested in each fund is also pre-decided based on diversification logic and performance. Users have complete flexibility to change all aspects and customise the solution. For users who have complex goals & needs, we do have a certified tech-enabled advisory team available on phone.
Any interesting investor trends you have observed among your client base.
- Users from smaller towns (B30) contribute 30%+ of our base
- Unlike common misconception that direct mutual fund users redeem frequently, users on our app are not redeeming and have invested for long term. Our redemption rates are half of the industry in the equity, hybrid category. Our churn rates are 1/5th of the industry in the retail segment.
- In the last 2.5years, if we consider all investments made by our users till date as one portfolio, this has beaten the benchmarks by significant margin. This means either we have only smart investors coming in or we have ensured that we make them smarter investors.
You started by offering direct mutual funds and now offer loans and insurance too. What is the idea of offering multiple product categories?
These initiatives are part of our mission to simplify financial journey of Indians from one place. We don’t throw the user in the sea of 100s of options but provide a simple, transparent solution for their core financial needs.
How do you identify cross-selling opportunities among your clients?
Our product launches are outcomes of consumer insight led development. This has helped us not only create a unique ecosystem of products but also helps us successfully up-sell products in non-intrusive manner, which is also in the interest of the consumer. This in turn ensures revenue generation and hence long term business sustainability.
