On ‘Trak’ to invest in the future
According to BCG’s “Global Capital Markets 2016: The Value Migration” report, by 2020 the revenue base of the capital markets will increase to $661 billion, up from $593 billion in 2015. Although buy-side and sell-side entities will generate about 81 per cent of the revenue, the share of information service providers and exchanges will increase significantly to 19 per cent or about $125 billion, a substantial growth from 2006 when it was 8 per cent.
Concurrently, the EdTech industry is predicted to grow to $252 billion in annual revenue by 2020 (data from a 2016 report from EdTechXGlobal and IBIS Capital). There is a paradigm shift in how the students expect to receive educational content. The sheer quality of online content from traditional paper publishers like McGraw-Hill (McGraw-Hill Connect) and Harvard Business Publishing is breathtaking. Also, people in some of the most underdeveloped geographies have benefited immensely from the Khan Academy’s approach.
Concurrently with this trend, in the Middle East, there is substantial focus on providing productive lifeskills to the ‘youth bulge’.
TrakInvest is a company that is positioned in the convergence set of FinTech, EdTech and the need for practical life-skills in rapidly emerging markets like the Middle East. Bobby Bhatia, the Founder and CEO, is a Stanford and Duke alumnus who has deep expertise in public and private investing. Of Indian origin and brought up in the Middle East, Bhatia has worked in O’Connor and Associates (synonymous with the Chicago Board of Options Exchange), JP Morgan Partners and as MD & Head of Principal investments at AIG for Asia Pacific.
While in Hong Kong, Bhatia keenly observed the Far Eastern familiarity with investments. He estimates that there are 350 million active investment accounts opened by the citizens of China alone. Looking westwards towards the Indian sub-continent and the Middle East, he saw a huge gap in awareness about investments and the skillset required to trade profitably. Gaps always present an opportunity.
Bhatia’s knowledge of the industry helped him identify the core problem. This lack of broad-based retail participation in equity markets is being driven by information asymmetry, conflicts of interest, and lack of curated content. The retail investors are overwhelmed by the information available and the need to make sense of it all – i.e., the problem of too much data leading to too little information.
Bhatia stayed away from creating yet another online brokerage platform. Razor-thin margins made the proposition unattractive. Instead, he focused on the education and technology aspects. He began building a state-of-the-art technology stack that combined simulation, artificial intelligence, crowd-sourcing of information and social media to deliver a real-world experience to aspiring as well as experienced investors.
A distinguishing feature is that subscribers can learn by tracking the most successful investors in the app (hence, Trak + Invest). Further, in partnership with the Indian Institute of Science, Bhatia provides TrakInvest subscribers the ability to earn a nominally priced online trading certificate. He started with India and Singapore, with a view to taking it back to the Middle East.
To spur interest, Bhatia launched ‘100days100jobs’. This campaign enables the firm’s subscribers to battle for a hundred jobs, across an array of options, based solely on the results of their trading skills. The strong interest generated led to the first interactive reality investment game show on TV. Check it out on YouTube.
Bhatia bootstrapped and built the TrakInvest technology from scratch and marketed it to its current level of success. Instead of investments, his interest is in partnerships that will help the firm scale across markets. For example, he sees significant opportunity in the Middle East for youth empowerment, especially in the 21- to 27year age-band. This age-band could benefit immensely from practical hands-on experiential learning in investments and finance.
His aim is to combine gamification, new media formats and technology in order to connect talent with opportunity in the fairest manner possible. His business model is elegant. On the business-to-consumer side, the quality of the content drives revenue, which comes in from subscriptions and certifications. On the business-to-business side, revenues come from media channels as well as from deep analytical insights into trading practices and trends. The latter is of interest to online brokerage platforms looking to grow their customer base. The writer is a director at Vyashara. He’s a digital banking and digital financial services evangelist, practitioner, advisor and consultant. Views expressed are his own and do not reflect the newspaper’s policy. He can be reached at ves@vyashara.com.