There was once a time, not too long ago, when investing in the stock market was considered to be an insider’s game. One had to have years of experience under their belt, access to a whole network of experts and financial advisors who could predict market trends well in advance, and of course, a sizable corpus of funds to make big bets and to provide a security buffer for risky investments. The coronavirus pandemic has upended many assumptions we held on to dearly, among them the idea that an amateur investor is basically an oxymoron. That belief has been vehemently challenged by thousands of millennial and genZ investors looking to get rich in this huge economic downturn.
The advent of companies like the American ‘Robinhood’, British ‘Freetrade’, Israeli ‘eToro’, Australian ‘Stake’, and Lithuania based ‘Evervest’ have changed the way stock market investing works. They have cut out high brokerage fees, the barrier to entry with respect to relevant and reliable investment advice, and even the emotional downside of investing by introducing AI tools that guide young investors to make the best possible financial decisions. Riding this wave of new-age investing platforms is Pickright, a fintech platform dedicated to making trading recommendations easy and transparent. Positioned as an AI/human dichotomous platform, it is enabling a new age of educated, ambitious, and upwardly mobile investors.
Millennials have always had it rough. Having witnessed the 9/11 attacks, the dot-com bubble burst, the 2008 crisis, and now the COVID-19 pandemic, they are financially less secure and well-to-do than their immediate predecessors, GenY. As a result, they have had to struggle harder to save up and cut corners on many expenditures otherwise considered commonplace. Having battled economic uncertainty and sluggish growth for nearly two decades, one would imagine their risk appetite is low. The truth is exactly the opposite.
Since the beginning of the lockdown in March, a huge number of young people have begun investing in stock markets. Armed with knowledge gained from the internet and from a trusted circle, they are creating a noticeable impact. Despite having caught the ire of many seasoned investment professionals, they continue to make investments; sometimes creating a personal fortune, other times facing bankruptcy.
Yet, while this trend ballooned in March, it has been prevalent for some time now. The age old restrictions to investment were growing archaic as more and more investors, across age groups and experience, sought release from these practices. India has a highly unorganized financial market with a multiplicity of sources providing varying investment advice, inaccessibility to top advisors, and a general lack of financial literacy. Dynamic new platforms solving these pain points and further enabling investors via AI have been poised to take over this segment.
The Pickright Thesis
Pickright’s business model is as follows: enabling investors to make better investment decisions by giving them access to their proprietary AI, or by connecting with advisors via the platform, and providing financial advisors a platform where they can engage with investors seeking advice. Charging a platform fee for the SaaS, commissions, brokerage fee, and an AI enabled platform fee is how they make their revenues.
Pickright’s competitive advantage lay in their superior AI tech, better designed to provide accurate and granular, actionable insights to investors to make trades. Their platform also allows investors the option to invest in any trading instrument of any global exchange. When 100X.VC invested in Pickright, they were at a proof of concept stage. Currently, they have developed APIs for integration with AI chatbots, developed a Pickright AI advisory, and are well on their way to create a Global Trading Advisory. They have on boarded over a hundred financial advisors and several thousand investors on their platform.
We at 100X.VC tend to look first and foremost at the founder’s profile when investing. We believe that good people and strong ideas, when put together, create dynamic companies. Archana and Namandeep’s respective professional experience, and their obsession with growing their business, sold us on their idea. We realized their unique disposition to create value in a conventional, yet scalable market. Over the past several months, we have seen them grow rapidly and sustainably.
The Way Forward
We invested in Pickright back in November 2019, when the sector was poised for rapid growth due to higher disposable incomes, increased data penetration capabilities that allowed for data driven investment decision making, and an overall positive economic outlook that increased risk appetite and allowed traders to foray into the stock markets.
The pandemic undid a lot of that initial momentum. Yet, as we have recently seen, savvy investors have demonstrated a peculiar keenness to invest despite the prevailing circumstances. It leads one to wonder whether the coming months and years, despite the ups and downs, will see more and more investors jumping the bandwagon. Saving up for retirement, creating wealth for comfort, and generating additional income for sustenance have become the clarion call for many millennials and GenZ-ers. Pickright is perfectly poised to enable these investors by providing them with sound investment advice.
Published on: September 6, 2020