Founded in 2015 and launched in April 2016 by Varun Gupta who is an alumnus of IIT Madras and a certified Mutual Fund Advisor, FinoZen is an app-based platform for one click investments. One has to choose the amount they want to invest (minimum as low as Rs 100) and the platform channels it to pre-selected liquid funds. Users can invest and withdraw anytime, anywhere and expect ~7.5-8.5% annual returns, as claimed by the platform.
Recalling the conception of the platform, Varun maintained, “Majority of India’s earning population aren’t regular investors. More often than not money lay idle in either Bank Accounts or got locked away in Fixed Deposits. This was my major concern. So, after months of studying the markets and customer preferences, and to help Indians inculcate a habit of personal investments, I created FinoZen”.
The vision of this Bangalore based company is to become India’s largest online investment platform by 2021.
Problem Statement Addressed by this Startup
Banking and financial systems are flooded with various investment options and fraught with information asymmetry. Much as regulations try to keep consumers centre stage with various disclaimers mandated, at the end of the day investments whether long, medium or short term are anything but a smooth experience. Furthermore, consumers often end up investing only to realize much later that the growth is far lesser or the money is locked in for longer.
Finozen was launched to make the process of investing transparent, convenient and simple so that anyone and everyone can invest. The company is working towards eradicating miss-selling of financial products and ensure a hassle-free and happy investing experience for everyone.
In its current avatar, the platform aims to help users realize everyday growth on their savings – “A far better option than letting money lie idle in savings accounts or locked up in Fixed Deposits,” as sworn by Varun.
What does it Offer?
FinoZen allows users to invest and withdraw anytime, anywhere. All investments are channeled to pre-selected liquid funds earning returns to the tune of ~7.5 -8.5% – much higher than Savings account.
There are no lock-in periods or penalties for withdrawal unlike Fixed Deposits. Further, users can start investing with as low as Rs 100.
At any point, users can see their total investments, total gains, gains made today, growth rate and past transactions.
Technology Employed by the Company
Briefing on the technological front of the company, Varun said, “We have a tried and tested robust backend platform interacting directly with Mutual Fund Companies, Registrar and Transfer Agents (for execution of transaction) and FinoZen App (for user to invest). This ensures seamless investments and withdrawals as well as a real time view on user investments through the app.”
Importantly, the onboarding KYC process (required for first time investors) has been completely digitized into 5 simple steps within the app.
Monetization Model, Traction Details & Funding Status
As mutual fund distributors, mutual fund companies pay a commission for investments made through FinoZen. That’s how the startup makes money.
As of traction, the company claims to have have over 400 active investors on its platform, having invested RS 40 lacs. Further, it maintains that with over 800 transactions till date, the company gets 10-15 new investors and 25-30 transactions daily.
Its Android app is rated 5 with around 500 downloads.
The company is currently bootstrapped. It is however, actively looking to raise an angel round of funding.
Scope and Future Plans
Speaking of the scope in this segment, Varun stated that about Rs 60 Lakh Crore of Indian Non-HNI consumers lies idle in Savings Bank or is locked in FDs. Hence, the size of the market that FinoZen is targeting, is huge.
The company is working on reaching out to these set of users and educating them on the benefits of investing through its platform rather than keeping money in banks.
He added, “also, there is a need for a simple yet sophisticated investment platform for a user to invest his money as per his goal in life and risk appetite. In the future, FinoZen will evolve and we plan to add more products and features on to our platforms in our aim to positively change Indian investment habits”.
Check out this Video to Develop a Better Understanding of this Platform
Confusion has well served the investment industry for decades; thanks to the vague terms and conditions, coupled with government regulations. These factors have often acted as an impediment for laymen in managing their finances. Considering the general scenario, and as stated by Varun, people in our country have a tendency of limiting their monetary management practices to bank deposits, either Savings or FD. The primary reason behind this phenomenon could be attributed to the acute dearth of information that prevails in the market regarding the benefits of personal investments, and more importantly, the ways to make those investments.
This area therefore, holds immense scope for disruption, especially around mitigating this information void amongst common people, and making personal investment an easy, comprehensible and a transparent affair. It will be interesting to wait and watch out for the innovations that FinoZen plans to make in this segment and see how it captures this huge pool of opportunities.