How Ajay Lakhotia's gamified stock trading app helps potential investors
Armed with years of experience garnered at reputed venture capital (VC) firms, Ajay Lakhotia observed that commoners and even those who've studied finance are baffled by jargon traders use. Plus, they are afraid to lose money trading stocks. At the helm of StockGro, Ajay is helping people learn the ropes of trading, sans the fear of losing money. Here's how he went about it.
Ajay worked with multinationals, venture capitalists before starting a fund
Hailing from a business family, Ajay worked in the manufacturing technology sector until 2008 when he moved to Europe briefly. By 2016, he had completed an MBA from ISB and worked for Capgemini, ICICI's investment banking wing, and Vertex Ventures (VC arm of the Singapore government's sovereign fund, Temasek Holdings). In 2017, he partnered with Fosun RZ Capital to establish Fosun's India operations.
Despite fearing losses, most people trade stocks based on hearsay
While funding fintech companies, Ajay realized that the Indian stock market was being ignored in favor of developing digital lending and payment gateways like Paytm and Razorpay. He also noted that while someone from a finance background would do their due diligence, the average layman usually trades stocks based on hearsay. "Investing in stocks is perhaps the largest consensus-based social commerce activity," Ajay remarked.
Despite colossal volume, Indian stock market is ignored by start-ups
Ajay says the Indian stock market has a $2 trillion market cap and clocks over $200 billion in derivative trade volume every day. This makes it the world's eighth-largest stock market and the largest derivative trade market. However, this asset-backed market isn't in start-ups' crosshairs.
StockGro could provide the hand-holding potential investors needed
Foreseeing scope to run a profitable venture in the field, Ajay founded StockGro to allay fears associated with market investments and commodities trading. In essence, StockGro is a game where users are greeted with two portfolios containing a virtual sum of Rs. 10 lakh each when they sign up. The money can be used to buy virtual shares and get started in trading stocks.
Transparent portfolios help StockGro's users learn from like-minded players
StockGro players can interact with the platform's community to share trading advice, build connections, and view each other's portfolios detailing each player's investments, their value, and their returns. StockGro highlights the best-performing portfolios on a live leaderboard for all to see. The most interesting part about trading on StockGro is that the stock price variations are streamed in real-time from the real-world exchange.
Leaderboards highlight top-performing player portfolios, reward players with real money
Ajay explained that once users are comfortable trading stocks virtually, they can join leagues and competitions for a nominal entry fee that contributes to the prize pool and offsets StockGro's running costs. Like the leaderboard, the best-performing portfolios in a competition win real money as prizes. Ajay said these events let players network with like-minded individuals and build their confidence to trade real stocks.
StockGro has successfully partnered with over 95 colleges in India
Today, a team of just 13 people manages the engineering behind StockGro's platform while five others handle the community and marketing aspects. Approximately 20 interns have helped StockGo partner with 95+ B-schools and colleges around the country. StockGro is also welcoming other similar start-ups and corporates to run their competitions and leagues on the app.
Stellar user retention rate indicative of learning benefit to users
Ajay says that StockGro's stellar 60 percent retention rate suggests users are benefiting and may transition to actively trading real-world stocks. The start-up has plans to ease that transition by partnering with broking platforms so users could set up trading accounts from within the app, Ajay added. In the short term, StockGro could introduce new asset classes like bonds, and mutual funds.
StockGro secured $1 million funding, predicts $6 million run rate
StockGro's team presently operates at a 20 percent gross margin on registration fees for in-app competitions. With a vision to go global, it's looking at a $6 million run rate this year. StockGro has secured around $1 million in funding from fund managers and unicorn founders in their Angel Round in 2020. Ajay says that talks with potential domestic and foreign investors are ongoing.
Just do it, no point living life with regrets: Ajay
Ajay emphasizes that regulatory compliance aside, getting to this stage was no mean feat since a fund manager's structured day starkly contrasts an entrepreneur's life spent firefighting various issues every day. He encourages every entrepreneur to embrace failure and derive learning from mistakes. He says he'd rather hire someone who tried, failed, and learned instead of someone with theoretical knowledge and a B-school degree.
