This App Aims to Solve the Mutual Funds Riddle and Make Investments Easy
The penetration of mutual funds has been very low and interest rates only headed downwards
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Fintech has been the buzzword in the Indian start-up ecosystem for quite some time now, but the interest in the sector among investors and entrepreneurs still remains unwavering.
While many entrepreneurs are working on making transactions a simpler and faster process than it already is, fintech has opened up a plethora of opportunities for other startups, going beyond the dimension of payment transactions.
Mutual funds is another sector within finance that has a lot of opportunities for growth, but hasn't seen penetration into the Indian market. But the opportunities in the sector attracted veteran investor Subramanya S.V. to turn into an entrepreneur.
Subramanya, who comes from a venture capital background (he was the India head of Bessemer Venture Partners, has made investments in companies like TaxiForSure, Bharat Matrimony and also served on the board of Snapdeal), has long been in the consumer internet space and then decided to take it up on his own hands.
He got together with his friend of over 10 years Anand Dalmia, an experienced investment banker, to set up Fisdom – a platform that makes mutual funds an instantly accessible investment opportunity.
Making Fintech Accessible
While the advent of fintech has seen a change in the way we deal with money, Subramanya believes there's still a long way to go. There is still a huge section of the society that needs better access to fintech products.
Investments, for example, are now opening up to technology. Mutual funds have for long been a kind of investment that needs a person to ensure the process and documents for the proof of transaction. And thus, the penetration of mutual funds has been very low and interest rates only headed downwards.
"Instead of letting the money be in the bank, people only had a few other options for investment – real estate or gold. People are opening up to other forms of investments now. The market size for mutual funds is great and we plan to expand to a large customer base through our digital approach," said Subramanya. Through their app, one can make a mutual fund investment in 30 seconds.
More than Mutual Funds
Incorporated in June 2015, Fisdom helps people invest in mutual funds but Subramanya says that they are not a marketplace. They are moving from just helping their customers invest in mutual funds into being a full-fledged advisor that executes the investment plans of people, all through their app.
The digital world today will help them achieve the same, believes Subramanya. Gone are the days when one was scared to use their debit card online, today people are ready to even let an online advisory take care of their investments. "The critical mass of consumers doing digital transactions online has created trust among people. But people are also getting used to a very high degree of customer experience, so that they don't have to go through any hassles," he said.
From an Investor to an Entrepreneur
For Subramanya, his investor background helped him a great deal in starting up. While on the other side of the table, he has worked closely with 8-10 startups and evaluated over 200 companies. That helped him understand the tactics of entrepreneurship, how to handle people and scale your business fast by judiciously using capital pumped in by investors. "Of course we had to go through our own set of challenges as well," he said.
But the doors for funds too opened up easily for him, albeit that's about it. "The first round was definitely easy with people who I worked with before counting on our integrity and idea, invested in the start-up. So, while my background helps me get access to the right people, there's still a long way to go," he said.
The Future is Bright
We have an aspiring class of over 30 crore. However, the penetration for mutual funds is less than 5 per cent. With Aadhaar and eKYC, there's a massive increase in the number of people looking at fintech for investments and more. They are also looking at partnerships for growth. They are already the official partners for investments with Lakshmi Vilas Bank and Bank of Baroda, thus reaching out to their customers as well.
"We plan to add more products related to insurance and premium, making sure that they are all done in a more simplified manner. The traditional way of selling mutual funds, too, is riddled with jargons and we plan to turn it into a transparent and intuitive process," he said.