The GoIbibo-MakeMyTrip merger in late 2016 was a watershed moment in the history of India's online travel industry. Ibibo’s founder, Ashish Kashyap, stuck around with the entity for a year before he started working on his next venture -- INDwealth. Tailored-cut for high net worth individuals, this digital wealth management platform helps users organise their cash flow, assets, stocks, loans and liabilities apart from providing analytics and advisory services.
Kashyap says the platform is powered by machine learning and artificial intelligence capabilities. Last October, it raised USD 30 million from Steadview Capital. Tiger Global came onboard in August by investing USD 15 million. Kashyap plans to use the money to build data science team and amp up machine learning (ML) and artificial intelligence (AI) fronts. He is also looking to hire more talents for the research and advisory teams.
In an interview with The Passage, Kashyap talks about his transition from the travel industry, why he chose wealth tech and the learnings from the past ventures.
The Passage: After being in the travel industry for the last few years, why did you choose fintech space?
Ashish Kashyap: The idea was born from a personal pain point. Most people’s finances are all over the place. I wanted to bring all my finances---investments, loans, taxes -- in a single play; consolidate everything. I would do all of that on an excel sheet. Even for my advance tax filing, my CA would really struggle. There was no one who was bringing all of this together. That was one big gap I saw.
I was cheated by a lot of established wealth management players in the country. The business model of most wealth management players was to sell investment products at high commission. Their ulterior motive was basically not for the benefit of the customer, but for their own good. None of these players are wealth management. They are basically distributors of investment products. And there is a huge need for someone to truly manage money in a transparent, honest way and give scalable advice. I realised if I can solve this, it will add tremendous value to customers.
When I did my research, I came to understand the structural problems in the incumbents, and hence I decided to take the plunge.
The Passage: What makes you different from other wealth management players?
Ashish Kashyap: INDwealth organises a family's financial life across multiple types of investment asset classes, loans, expenses, credit cards, taxation--in a single play. It enables the head of the family and family members - who get taxed- track their loans, investments, stocks, mutual funds, upcoming loan payments, and get analytics on all of these. It is basically a financial super app for the family.
None of the wealth management firms in the country do what we are doing. On one platform, we organise users’ finances irrespective of where they bank, which broker do they buy and sell stocks from, who they took a loan from - we bring all of these together. That's the most significant differentiator. The second is, having brought all of this together, we provide advisory at scale. We basically sketch for consumers what is going to be their financial future, and what are their financial future needs. We recommend action so that their financial future can grow. Basically, we become a balance sheet, a profit and loss statement and the financial future of customers.
The Passage: INDwealth primarily caters to HNIs. Why did you launch a niche product as opposed to a mass-market product?
Ashish Kashyap: The product is targeted at high net worth families for multiple reasons. The problem we are solving is very different from what other players are doing. We are a financial life engine. Whereas others are distributors of various kinds of mutual fund products, loans, etc.
We are bringing our customers’ financial life together and recommending financial future for them using machine learning and AI. If you look at the wealth concentration, 95% of wealth is concentrated in top pyramid---with some 7 million people. And given the value proposition and the use case for our platform, it will only be useful for those people who have some assets, some loans, credit cards and certain cash flow.
We bring all the financial aspects of customers together and tell them how things would look ten years down the line or when they retire and the actions they should take---what they should save and invest, how much they should reduce their loan cost, etc.---basically give actionable advice to customers every day, every month.
The Passage: What’s your revenue model?
Ashish Kashyap: Our revenue model is simple. It’s a fee on the assets on the platform that we are advicing---that's revenue model number one. We also get a fee from asset manufacturers and loan manufacturers.
Organising money, loans, assets, liabilities, mutual funds, etc., tracking them and analytics on all of that is absolutely free. The advice on improving existing assets, adding new assets, improving your financial future is paid. There is a flat fee---0.3% of the assets in a month---that customers pay us.
We have already partnered with all the asset management companies and rock star fund managers as well as a lot of lending companies. We will be partnering with insurance companies shortly.
The Passage: How many partners do you have right now? How do you plan to level up?
Ashish Kashyap: We have almost 250 partners. We launched the iOS app in April and the Android app in July. We will be adding different types of investments, lending products, insurance products and family management products as we keep increasing our consumer base. For example, we have just introduced a succession planning and will drafting service on to the platform.
The Passage: Where are you using ML and AI capabilities on the platform?
Ashish Kashyap: In the financial services industry, there is massive availability of historical data. We leverage a lot of that data from multiple sources, which goes back 30 years. We use AI and ML to enable customers to create an investment basket and essentially forecast the future of that investment basket based on some 100 plus features and very large historical data of the last 30-40 years.
We use these capabilities to predict the probability of default. We want people to secure their money and to hedge their exposure to certain kinds of funds. We also use machine learning to forecast our customers’ financial future.
We basically rely on data to create machine-learning algorithms to enable the customers to rebalance their investments, create better investment baskets, forecast their financial future and manage risks.
The Passage: How do you source the financial data?
Ashish Kashyap: Inflow data, outflow data, the indexes data, etc. are all available through various sources. I can’t name the sources for confidentiality reasons. But these are data analytics companies tracking BFSI (Banking, Financial services and Insurance) and multiple analysts. There is also historical index data available, such as historical inflation and the current inflation which is free. So it's a mix. We collect data from both free and paid sources. We get raw data and build our ML algorithms on the top of it.
The Passage: How many customers do you have?
Ashish Kashyap: At this point, we’re not open to disclosing the numbers. Let’s put it this way. We're basically doubling up on a month-on-month basis. But it’s still early days. All the KPIs (Key Performance Indicators) are growing by 80 to 90% every month. KPIs like assets under management, number of families and loans on our platform, which are very important to us.
The Passage: Who are your competitors?
Ashish Kashyap: A lot of our competitors are actually the old companies. One set of competitors for us is boutique wealth management companies, which are very regional currently. The other set of competitors is some of the non-banking, wealth management outfits. But these are mostly non-digital players. This is similar to travel industry from a structural point of view. The tour and travel agents charge very high commissions and find ways to make a lot of commissions. Similarly, we have boutique wealth management companies, where they basically provide full services to customers completely offline. They don't have tech but they have a lot of manpower. For us, it's really about moving the game online from offline and educating the customers. Money is a touchy topic and, obviously, a lot of trust needs to be built.
The Passage: Do you see new-age companies like Paytm and Phonepe and Zerodha as rivals?
Ashish Kashyap: We are partners with Zerodha, a brokerage free trading platform. As far as other players you have mentioned, their audience is completely different from our audience. Their audience is millennials---first time investors in the market. And they are trying to simplify the investment process for a lot of them. And they are doing a good job, honestly.
Secondly, we are about multi-asset portfolio management. Not only is the target audience different, but even the use cases are very different. So, unless any of these digital players start doing what we are doing or unless we launch another app for the millennials, we do not consider them as competitors.
The Passage: How did you convince Steadview to invest USD 30 million just based on your vision?
Ashish Kashyap: I brainstormed the idea with Steadview capital team. And they got excited. And for me, as I get people to invest in the company during this journey, my focus is going to get partners to help me co-create the platform. Steadview liked the idea and decided that this is going to be a long journey.
The Passage: Do you think your track record also played a role in onboarding investors?
Ashish Kashyap: Yes, that does play a part. I have executed multiple ventures in the past, and have given very good returns to my prior investors. Apart from Ibibo and Redbus, I have also launched Pay U in India. I think all of that definitely adds up. Besides, what we are building, the vision, how we are improving the structures in the country, how we are executing the same at scale also play a role. It is a mix of everything.
The Passage: How do you plan to acquire customers?
Ashish Kashyap: It's still early days, and we are still baking the plan--evaluating and doing some research. But given our niche audience, we need to think through marketing ideas and user acquisition ideas, which are not linear. We will update it as we hatch them.
The Passage: What are the biggest learnings from your last venture that you are applying here?
Ashish Kashyap: I think that my biggest learning is that one has to increase the execution velocity by 10X in this world where things are changing so fast. The second is if you want to deliver advisory at scale and services at a lower cost to customers, you have to have very low fixed cost structures in the company.
The Passage: When you decided to leave MakeMyTrip, did you have an idea about what you were going to do next?
Ashish Kashyap: As you know, I sold GoIbibo and Redbus to MakeMyTrip. And when the company that you built gets acquired, it's very hard for a founder to then operate in that system. In many cases, we see founders exiting. Right from the day of acquisition, I had decided that I wanted to build something new. There were multiple ideas that I had at that time. And 2017 end, when I exited, I was excited to build the next value proposition.