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Wealth management startups in India often end up providing general investment schemes, which might not be suitable equally for the rich and the not-so-rich. For the rich and the high net-worth individuals (HNIs), personal wealth managers are an affordable option, helping them put their eggs in several investment baskets. For the rest, there is Bengaluru-based Koshex.

When Koshex was featured in Inc42’s ‘30 Startups To Watch List’ in May 2022, we wrote about it in brief – a fintech startup that offers customised investment solutions across fixed-income and market-related products, like mutual funds, smart deposits and digital gold, based on an investor’s budget, savings and expenses.

Before Inc42’s Fintech Summit 2022, we took the opportunity to understand the inspiration behind Koshex’s business model to build personalised wealth management at scale for a large part of the Indian population.

Kosher, founded in 2021 by Komal Kumar Gupta and Akash Agarwal, partners with asset management platforms approved by the Securities and Exchange Board of India (SEBI) and the Reserve Bank of India (RBI) to offer investment deals and ‘SafeGold’ to provide digital gold investments.

With insights from 2 Mn+ data points from a single user, Koshex wants to build a community of super savers – people who save at least 15% of their income.

The founder duo are former executives of BNPL and credit platform Capital Float. They connected in their former organisation and the conversation on personal finance struck a chord. Agarwal, a fintech professional for eight years, had always been keen on the business aspect of personal financing. Meanwhile, Gupta, a tech expert, recognised early that while he had access to an expert to sort his wealth, there was a need to democratise such solutions at scale.

While financial advisors recommend investment products based on past trends, Koshex’s founders decided to build a learning algorithm that would recommend curated investment models based on data insights such as geographical location, income levels, demography (age, gender, marital status, etc), among others.

For instance, Koshex allows investors to choose from 40+ fund houses and more than 5,000 schemes to invest in mutual funds alone. These schemes are then filtered down, cross-referencing the data points, to offer a tailor-made solution.

DIY Wealth Management – Taking The High Road

Koshex has been built with a vision to help users invest two months’ salary in a year, Agarwal told Inc42.

Talking about consumer demography, he said Koshex is targeting customers between the age of 23 and 36 years with an income of at least INR 25,000 per month.

Having identified the user demography, Koshex realised that despite several investment applications, a huge number of users in its target group thought that they didn’t have enough surplus to invest and were disheartened to not be able to get into the organised channel of investing.

Thus, Koshex’s first touchpoint is helping users understand their financial habits – how and where they spend, their credit history and loans they have taken, how much surplus they can build and where that surplus can be invested.

Agarwal pointed out that there is not a single application in the country that can correlate investments to liabilities or otherwise. With Koshex keeping a tab on the users’ spending habits, the power of its balance sheet transfers to the users, and they can decide where and how to invest.

Currently, Koshex claims that it gets 80% of the persona of its new consumers right. Gupta stated that the percentage would reach over 95% once the platform has over 1 Mn users – that’s when the second phase of Koshex’s vision will come into play.

Collective Buying – An Idea In Making

Besides savings and investments, Koshex is also working on a collective buying module, wherein the data points captured by Koshex’s algorithm will enable the customers to come together to demand a product specifically catering to their needs.

Gupta cited examples of loans and personal investment baskets. With savings and investments already a part of the users’ financial journey, the wealth management startup has the opportunity to bring together a set of customers who can demand loans and interests or ask for wealth managers to build investment baskets catering to their needs, he said.

“Since the profiling of the customer and the entire journey of the customer is within the Koshex module, we can set closer tie-ups with manufacturers (financial institutions) that would prove to be a boon for us,” Gupta added.

As for banks and NBFCs, who would provide the financial products, Gupta stated that with every customer vetted by Koshex, financial institutions can reduce their customer acquisition costs (CACs) and get ready customers of similar personas.

The startup has already gone for a soft launch with select products in the collective buying category, but due to its nascency, he declined to provide more details.

From Building Super Savers To Super Wealth Creators – The Ultimate Vision

Koshex is keen on helping users differentiate between savings and investments.

Currently, Koshex has a family of 400,000 users in the age group of 23-36 years who use the platform at least seven times to check and make investments. The startup charges 2-3% of a convenience fee from these customers, meaning as their investment value grows, Koshex’s revenue grows.

It competes with the likes of IndMoney, Groww, and Wealthy in a market poised to grow to over $60 Bn by FY25.

However, users do not even have the basic understanding that their savings and investments need to yield returns above the prevailing inflation rate.

With Koshex, the founders aim to bridge this learning gap to build savers from lower middle-class to upper-class families and automate wealth creation by personalising investment baskets.