A clutch of startups is trying to use technology to digitise the entire personal financial management for consumers, challenging established fintech entities that are also eyeing this space for growth.
Goalwise, Wizely and Basis are a few of these early-stage startups that are positioning themselves as personal finance management applications for the millennial consumer. Starting off with a goal-based savings product, many plan to eventually foray into lending, insurance, investments and others.
These companies are up against large technology giants such as Paytm, Zerodha and ETMoney that have already amassed a massive user base offering one service, but have since expanded in scope to every aspect of financial management. ETMoney is owned by the Times Group which publishes this newspaper.
Although the challenge is formidable, these entrepreneurs are relying on a fresh mindset, strong technology intervention and differentiated offerings as key tools to win this battle. Most of the established tech companies have expanded into personal finance management after offering one key service. Paytm has moved from offering payments, while Zerodha has moved from stock broking services. A massive market opportunity, however, has caused new entities to jump in.
These companies want to disrupt the concept of savings and use it as a hook to compensate for narrow margins in their own businesses.
“Even if we take the tier-I or tier-II cities and the digitally native customer base on a conservative estimate, the number would be 50 to 75 million, which shows at a basic level what could be the target market,” said Nihar Bobba, cofounder, Wizely.
Bengaluru-based Wizely counts Vijay Bobba, who was previously the chief executive of Payback, as the other founder. Wizely offers a goal-based savings platform that aims to help young salaried consumers manage their finances better. The startup intends to offer a bank account through a leading private sector lender and extend it to investments, credit and insurance.
Another goal-based personal finance management startup, Goalwise, is also embarking on a similar route. Having raised $1 million in seed funding, the Bengaluru-based entity is now in the process of raising its series-A round. With offerings like robo-advisory for all forms of financial investment, Goalwise intends to disrupt the space dominated by the likes of Scripbox.
“We are offering much extra by assigning specific goals to our consumers, offering risk-based profiling and allocating assets accordingly,” said Ankur Choudhury, cofounder, Goalwise. “We are also providing commission-free direct plans on mutual funds.”
Goalwise has developed an in-house algorithm to not only offer customised investment products but also alterations to the portfolio as per changing market dynamics, Choudhury said.
“We have both insurance and mutual funds; for insurance we are offering term plans and wish to add health soon,” he said.
Competing with them is a much younger company, Basis, which started less than a year ago but is aimed only at women investors.
Founded by Hena Mehta, Basis is a personal finance management startup for women. While the company is still developing its product suite and is in the process of raising a seed round, Mehta is creating knowledge material for women to discuss money.
“Women’s needs are very different and they need products customised for themselves, which is a space I want to disrupt,” said Mehta, who graduated from The Wharton School. “To start with, we are creating content and social circles around financial management for women.”
Industry reports estimate that only a fraction of Indians invest in financial instruments – for mutual funds the number could be as low as 1.5% out of 134 crore Indian citizens.
The opportunity is huge, and these young entrepreneurs are ready to drive the next big wave of disruptions in personal finance.