Started in 2016, Kuvera has been one of the fastest growing online investment platforms in India. In four years, it has garnered a customer base of 3 lakh investors with assets under advisory of Rs 5,000 crore in mutual funds. Gaurav Rastogi, CEO, Kuvera, chats with Morningstar about how they are riding the digital wave in the mutual fund industry.
Take us through the genesis of Kuvera.
Kuvera came about at the intersection of our stories. My colleague Neelabh Sanyal (COO, Kuvera) and I come from the same industry. I was a proprietary trader for Morgan Stanley for nine years while Neelabh was in the Investment Banking group of Axis before Kuvera. We have seen mis-selling of financial products – especially investments and insurance - closely in our professional lives and in our personal lives. I remember my cousin sister and my dad having to go from one fund house to the other to get their regular plans switched to direct plans. Mayank, who is our chief technology officer, has been an investor for over ten years and he came onboard because as an investor he could relate to the problems, of access, of conflict and of simplicity, that we were looking to solve and thus came-up the idea of Kuvera, a platform that integrated these needs. You can think of us as the anti-sale’s financial services platform. If you have funds in your carts, we won’t pester you to buy. If something does not help investors – be it fund packs or best SIP days etc. – you won’t find it on Kuvera. So, our focus always has been about simplicity, about building an honest financial services platform backed by technology, and to pass the cost savings of technology to the end user.
In four years of launch, the company has built AUA of Rs 5,000 crore. How do you reach out to prospects when you launched the platform? How do you acquire new clients?
The first phase of our expansion was through content and users’ word of mouth. We have been extremely lucky to get a great user base early on – that helped us improve our offering and spread the word on our product. The second leg of growth was through feature led expansion. We have focused intently and led the market in solving issues that are unique to Indian investment ecosystem – consolidating existing portfolios, easy switch to direct plans, ability for a family to invest and plan together and so on and so forth. Even today we get a significant proportion of our users from referrals. As we have grown, we have added digital channels to augment referral led growth.
What proportion of your investors are first time mutual fund investors?
About 35% of our user base are first time investors.
You were one of the first platforms to offer free of cost access to invest in direct plans. What was the rationale?
We are the first completely free investing platform in India – since Oct 2017. So yeah, you can say the peers replicated our model. Our biggest contribution so far is that we have made free direct plan investing mainstream. Even forcing some platform to switch from regular plan to direct plan and go free. So just by that we have already probably saved the Indian investor a lot of money - across our platform and those of our peers. We do feel very happy about it.
Besides transaction facilitation, what value add services are you offering?
Besides the basic, that is ease of buying and selling mutual funds we do a lot more. Just to list a few down here:
- Complete goal planning and fund recommendation. We also advise on periodic re-balancing as the goal date becomes nearer.
- Family accounts allow uses to manage all their investment accounts from one login.
- TradeSmart allows user to see the capital gains impact of a sell or switch transaction before they execute it.
- Tax Harvesting allows users to save up on the Rs 1 lakh LTCG tax exemption that is allowed under the tax code.
- Digital Gold allows users to safely diversity into gold w/o worrying about safety and liquidity and at entry points of their liking and ability.
Given the plethora of websites and apps mushrooming in the robo advisory space, do you see consolidation going ahead?
Some of it has already happened for example MobiKwik buying Clearfunds. Some sites have closed or are in the process of winding down. When we look at the competitive landscape now, we see that along with us only a handful of platforms have been able to scale. You see the same 5-6 names mentioned everywhere these days. So, some of the consolidation and pruning is behind us now. Our focus is on our value proposition and not so much as what the competition is doing. We led the way with free direct plan platforms, with easy consolidation and switch to direct plans, and lots of other features; and we want to focus on that. Focus on ways to make the users’ investing life easier, everything else will fall in place on its own.
How many investors have shifted from regular to direct plans on your platform?
Amongst investors who have regular plans, almost 2/3 have shifted or are in the process of shifting to direct. Due to taxes and exit loads it takes about 6 to 12 months to smartly move to direct plans and we provide the right tools to manage that process.
What’s your roadmap for Kuvera for the next three years?
We will continue to innovate and expand our advisory offering across financial products. We have an exciting lineup of product releases coming soon and our aim is to solve as many pain points in personal finance as we can. We are building a machine learning team and are perfecting personalized solutions that we will roll out over the next year. There has been a lot of innovation in financial products which can be brought to every investor through technology and we want to be at the forefront of that.
