Finacular

Finacular is a B2C based holistic personal finance platform for the millennials in India. We are leveraging technology to make the traditional wealth management services accessible to the masses. It’s a revolutionary platform which will enable users to invest in the best possible way and build long term wealth.

Through our platform, we hope to guide users on the path to financial independence by helping them identify the best investments and optimizing their asset allocation, all in an automated manner.

The web version of the platform is ready. We have started doing a soft launch with our beta version. Currently the product is in the initial beta stages and we are doing rapid testing of the product.

We have around 50 users who have signed up on the platform and another 300 in waitlist.

We are actively marketing on LinkedIn, Twitter, and other social media channels. We have around 3000+ followers on LinkedIn already.

Our target segment is mostly the salaried millennials in the 20-40 age group. Today, there are more than 50 million Demat accounts in India and more than 100 million mutual fund portfolios.

In terms of equity investments, Indian markets are the least penetrated. Indian households do not have more than 5% exposure to equities.

Awareness about personal finance and investments is constantly increasing in the Indian markets. Its projected that the wealth management industry will grow in double digits (15% CAGR) over the next decades with more than 100 Million households taking exposure to equity markets over the next 5 years.

As the middle class rises in the country, these numbers will only go up. Today financial services and wealth management is one of the most lucrative segments in India.

In the future, we also have plans to scale globally. Since the core financial planning concepts remain the same everywhere, the platform can easily be scaled to many other countries.

For reference, platforms like Groww serve more than 15 Million users today, while Zerodha has more than 6 Million users. Smallcase has a user base of 2.5+ million people. Thus the market is very very large.

Problem:

Personal finance as a subject is not taught in any educational institute in India. We learn how to work for a monthly pay cheque, but not how to build wealth over the long term. Most people, even after having worked for more than 10 years are not able to build a runway of even 2 years. High inflation in India erodes the savings for most of us.

The traditional wealth managers in India are only accessible to the HNIs and retail investors struggle to make the right investment choices with their money. In spite of hundreds of transaction platforms being available, most people are unsure of their personal finances and rely on news paper articles, News shows, social media and friends and family for their investment decisions.

With over 2500+ mutual fund schemes in India, 5500+ listed stocks and numerous other investment options, an individual who is not financially savvy struggles to make the right investments.

There are hardly any platforms which allow people to track all their assets and the overall long term growth rate of the net-worth. Focus on a proper asset allocation is completely missing as well.

Opportunity:

We feel there is a huge opportunity in this space. People are slowly become aware about personal finance and the wealth management industry is projected to grow in double digits over the next decade. There are more than 50 million Demat accounts in India and 100 Million mutual fund portfolios. This number is only going to increase in the future.

The limited number of investment advisors are not able to serve this burgeoning market and a holistic wealth management platform can have a huge impact in making the masses financially stronger.

We are building an extremely simple, easy to use platform which any individual can use to track, manage and improve their personal finances while helping them build wealth in the long run.

All existing platforms are more transaction oriented in nature and facilitate buying and selling of investments. Advisory is mostly missing, and the users have to user their own judgement in deciding which investment to pick. A user is bombarded with thousands of mutual fund and equity options which makes it extremely difficult for them to identify the right investments.

How are we solving this problem?

Rather than offering thousands of mutual fund schemes and equities which a user has to choose from, we are offering 1 single basket of high quality equity schemes, debt funds and cash saving options to the user along with a proper asset allocation. Using our smart asset allocation algorithms, our objective is to help people optimize the growth rate of their overall net-worth.

Finacular is a 360-degree financial planning solution. We help people project their finances 10-20 years down the road, calculate their current runway and when they could potentially be financially free.

For users who want to select their own mutual funds, we are developing our own rating methodology where we look at the quality of underlying holdings in a mutual fund scheme and present the information through easy-to-understand visualizations. Currently all mutual funds are rated based on their past returns only, which we feel is not good enough to identify the best mutual funds for the next 5-10 years.

We also help visualize the overlap between various mutual funds and clearly show how many stocks an individual owns whether directly through a Demat account or indirectly through mutual funds. We have found that most people end up investing in at least 200 stocks directly or indirectly which leads to mediocre returns in the long run.

Some of our competitors would be companies like Indwealth, Finbingo & Arthayantra in India. Presently, most people rely on the advice of friends and family, social media and news channels for their investment decisions.

Few engage a Wealth manager (mostly accessible to HNIs) and registered investment advisors for their financial planning.

Globally, similar companies include Personal Capital (US), WealthFront (US), Betterment (US), Nutmeg (UK), etc.

In terms of differentiation, there is hardly any platform in India which provides holistic wealth management services to the masses. No platform provides asset allocation services which we feel is the most important concept in any financial planning. There is hardly any platform which analyses the health of the portfolio by looking at the underlying equities in a mutual fund scheme.

We have also built a comprehensive financial planner which projects financials of a individual throughout his life and shows the impact of major expenses on his networth.

A user can also find out his current runway and estimate his financial independence age.

We are one of the very few platforms which provides unbiased, commission free, high quality advisory to the users. We believe in “Skin in the Game” and recommend the same assets where we invest our own money as well. What is good for us should be good for our investors as well.

Unlike other platforms, we do not plan to monetize or sell user’s data to any 3rd party platforms.

We are also working on building a complete knowledge base around personal finance in the form of blogs, articles, infographics and videos.

Other than this, we are also conceptualizing a personal finance game as a complimentary offering to our platform. We hope to subtly teach concepts of personal finance through a very simple game and also use the game for cross marketing our core platform.

There are several ways by which we could monetize our platform. However, our primary revenue source is subscription fee for using the platform. We plan to charge our users a very small fees for using the entire platform. We plan to keep the fees as low as INR 100 (USD 1.3) per month so that people who have just entered the workforce at lower salaries could afford us as well.

Over the next 5 years, we aspire to reach 1 million paid users with recurring annual subscription. This will allow us to hit revenues of more than INR 100 Cr (approx. USD 13-15 Million) with margins as high as 60-70%.

Other revenue sources include fees for direct equity model portfolio. We are also working on B2B offerings for our product.

Business Model:

Our primary business model is providing a B2C SaaS based application for the masses. However, we also have B2B offerings in our roadmap.

Channels:

Our distribution channels include approaching the customers directly through social media channels, blogs, webinars etc. We are also exploring B2B2C channels and currently in discussions with a very large conglomerate to provide the application to their 1 Lakh+ employees. We plan to conduct personal finance and financial planning sessions in a large number of corporates to increase our visibility.

We would also be working with large educational institutes and universities to provide the application free of cost to their students. This will help us building a strong pipeline of potential paid users in the future once the students graduate and start earning.

In the future, we would also be exploring partnerships with a few channel partners who could help us expand our reach even further.

Metrics:

Some key metrics for us would include the total user base and active user base, paid subscriptions, Assets under management and subscribers to our website.

60% on product development and enhancements, 30% on GTM which includes financial research and marketing and 10% on infrastructure.

Up to 20% stake in the company

Since this is a SaaS based product, one of the challenges which we need to overcome is ensuring users pay for the platform and continue to be on the platform in the long run. There are several measures which we employing to drive engagement.

Short term market volatilities often cause equity investors to panic. We are trying to use several ways to keep users invested for the long term and not be worried about short term volatilities.

There is always a risk of competition coming in. In fact, if there is money to be made, there will be competition. We feel that the market is extremely huge for even 20 different players to exist. Increased competition will in fact drive adoption of such platforms faster and help in expanding the user base.

Our challenge will be to continually innovate, come out with new offerings and stay ahead of the curve. We feel, our simplistic approach will keep our costs low and allow us to offer the platform at very low costs. Our knowledge base, personal finance game and other similar innovations will continue to allow us to stay ahead in the game.

Recently got selected in Finblue Incubator Program by STPI Chennai. Also member of US based Start-up Grind community, an invite only program.

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