Speaking at Inc42’s Fintech Summit 2022, Mukesh P Kalra talked about the three stages of evolution of ET Money
While the startup focused on onboarding customers in the first phase, it made decision-making tools in the second phase
During its third phase, ET Money launched an advisory product that recommends to users what should they do in terms of investment strategies
As the adoption of fintech products has increased over a couple of years, the need for financial literacy among young retail investors has also increased. While many fintech startups are running several programmes to educate consumers, ET Money has taken a slightly different route. The investment tech startup has worked on building tools that will help users make decisions.
“Our evolution has been focussed on how we help consumers,” Mukesh P Kalra, CEO and founder of ET Money, said during Inc42’s Fintech Summit 2022. The first phase of ET Money’s evolution revolved around solving onboarding problems which are largely solved now, Kalra said.
“At the next stage, we invested a lot in creating much stronger decision-making tools and providing those products,” he added. For instance, ET Money has a product called ‘Investor Personality’, which tells users their biases in terms of risks and rewards, and how they behave as a person, based on a series of questions.
Kalra said that a lot of emotions are involved when it comes to money, and when people know themselves, they stick to their decisions.
ET Money, he said, worked on building and making available such decision-making tools to customers in the last two years. It has a product named ‘Portfolio Health’, which helps users with the issues with their portfolios. Moreover, users can import their past portfolio data also.
In the third stage of ET Money’s evolution, it launched an advisory product that recommends users what they should do in terms of investment strategies or asset allocation, rather than focussing on timing the market.
“A lot of people talk about asset allocation but nobody has ‘ productised’ it for mass. The asset allocation principles that everybody knows in theory, are available only for HNIs who usually have a team to work on it. Nobody has democratised it,” Kalra said.
The product, which was launched three months ago, has seen a 30% month-on-month growth, Kalra said. As it has already built such products, ET Money does not focus a lot on theoretical education, he added.
ET Money, earlier known as SmartSpends, was founded in 2015. It started its journey as a personal money management app to add a host of other financial services later. It competes with the likes of Zerodha and Groww in the investech segment, which is the second-fastest growing sub-category in the fintech segment.
India’s investech market, which was pegged at $6.4 Bn in 2021, is expected to reach a size of $14.3 Bn by 2025, as per an Inc42 Plus analysis.
The global economic slowdown due to the ongoing Russia-Ukraine war has also impacted the funding of Indian fintech startups. The fintech startups raised $1.77 Bn during January-March 2022, almost a 45% decline from $3.2 Bn raised in the December quarter of 2021, as per an Inc42 report.
