July, 22, 2017
A retail platform for mutual funds
19 Jan
2017
Posted by Poornima Kavlekar

Faering Capital-backed Funds India is a platform focused on mutual funds for retail investors. It is all set to expand its customer reach across the country and plans to enhance its service offerings especially using mobile platforms and seeks to grow its market share from the current two per cent to 15 per cent over the next five years.

“We set up our fintech company even before fintech was an ‘in-thing’,” states Srikanth Meenakshi, co-founder and COO of FundsIndia. Both the founders,C. R. Chandrasekar and Srikanth, gained considerable experience in the American financial services market and have worked in technology in the financial sector. “We had blind faith in the mutual funds industry. Given its performance and how it is a must-have product in every American household, we thought such a transition would be inevitable in India as well,” says he.

Hence, they launched the financial services platform, FundsIndia, in 2009 to help mutual fund investors invest in funds in a single place using digital channel without any paper work.“There was a perceptible need in the market for such a platform which was simultaneously independent (without any bank or financial institution tie-up) and capable of providing full service,” says Srikanth.

The company offers customized investment advice as well as a state-of-the-art, user-friendly digital platform (mobile and web) to implement the advice. It is an omni-channel service provider wherein customers can get insightseither by talking to their personal advisor or by engaging with its online platforms. Similarly, execution can also be conducted either through a mobile device or web platform. “The individual strengths of our research and advisory services combined with the technology are the factors that distinguish the company from the rest in the market,” states a proud Srikanth.


The company has also launched an e-KYC service for new customers, which facilitates on-boarding of clients using Aadhaar number, thus ensuring zero paperwork.


In 2010, Funds India raised Rs. 3 crore from Inventus, following which it started getting serious with digital marketing and began expanding its scope. The company received Rs. 20 crore from Silicon Valley-based Foundation Capital in 2012, which aided the scale up of its digital marketing efforts and led to significant growth in terms of customer traction. In 2015, the company raised funds from Faering capital and others to the tune of US $11 million and it is utilising these funds to widen its reach across the country and to enhance its service offering, especially using mobile platforms.

Taking long strides

Funds India has witnessed a strong growth in 2016 and has made good progress with respect to its product and platform. It has grown three times year-on-year with respect to inflows and assets, and has more than 100,000 customers and is processing close to 120,000 SIP transactions a month.

The company has recently launched two platform features. One, an integrated robo-advisory service named ‘Money Mitr’ which advises investors on one-time or SIP investments, goal-oriented or ad-hoc investments, and so on. Two, an in-house mutual fund ratings service that enables its platform to be a comprehensive mutual fund research and data service provider for the customers along with advisory and transactional services.

The company has also launched an e-KYC service for new customers which facilitates on-boarding of clients using Aadhaar number, thus ensuring zero paperwork. “This has made a significant difference to our on-boarding process – both to our customers as well as to our processes and our on-boarding team,” states Srikanth. By entering the Aadhaar number and one-time-password, KYC registration for a customer is complete and they can start investing immediately. “The elimination of paper work has been a welcome move for our customers and it has quickened our on-boarding process by more than 50 per cent,” says he.

Recently, the company also launched a SIP-Insure service that enables customers who invest in SIPs from leading AMCs get free life insurance coverage upto Rs 25 lakh. “We are also planning to launch a ‘Super FD’ product which will help customers get a superior alternative to fixed deposits in these days of falling interest rates. And a ‘SuperSavings Account’ product will enable them to get more returns on their idle money without losing any convenience when it comes to liquidity and money availability,” adds the COO.

A strict regulator

“We have a very stern regulator in our sector that has been particularly impactful for us,” says Srikanth. A strong regulator works very advantageously in terms of building market confidence in the products (mutual funds) that the company sells. However, it has its flipside too. He says, “This comes at the cost of having to keep changing our processes, systems, and sometimes, the business model to keep with the changes in regulations that can come fast and thick.” Regulations concerning KYC registrations, for example, have changed about five times in the last seven years, causing the company to adjust what it does and how it gets data from its customers.

Another challenge is the level of awareness about the products in the market. Mutual fund penetration in the retail financial market is very low (less than four per cent), and it is largely due to a lack of awareness about its benefits. “As a small, online company, we face the challenge of having to grow the market while going after existing investors,” states he.

Looking at the bigger picture

Despite these odds, there is no doubt that the sector is poised for growth as a couple of big opportunities wait at the anvil. One is, the ability of the customer to invest using their Wallet, from service providers such as Paytm. “This will help customers make regular monthly investments with much more convenience and speed than otherwise,” opines Srikanth. Secondly, the consolidated, central KYC will completely eliminate the need for doing KYC for fresh customers. “This will bring down costs and speed up on-boarding of customers,” adds he.

All these factors will aid in the company’s vision of becoming a full-service, comprehensive investment platform for Indians. “We are there to a certain extent from a product and services perspective, but we really need to go further when it comes to reach and expansion of customer base. In five years, we seek to grow our market share from our current one to two per cent to 10 to 15 per cent,” concludes Srikanth.


Snapshot

Founders:C. R. Chandrasekar and Srikanth Meenakshi

Year:2009

Concept:It is an online investment platform that provides investors access to a range of investment products like mutual funds from leading fund houses in India, corporate fixed deposits and stocks.

Investors:In 2010, Funds India raised Rs. 3 crore from Inventus. The company received Rs. 20 crore from Silicon Valley-based Foundation Capital in 2012 and in 2015, it raised funds from Faering capital and others to the tune of US $11 million.

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