From Simply Wall St to Stockspot and StockLight to FirstStep, many Australian startups have emerged in the past few years attempting to decode the stock market, make it more accessible to investors of all ages and experience levels and offer an alternative option to paying financial advisors exorbitant fees to manage investment portfolios. The latest market entrant is Sydney-based INDX.GURU. In similar spirit to its predecessors, INDX.GURU wants to be the fourth estate of the stock market industry, bringing much-needed transparency to an industry rife with jargon that’s indecipherable to the average investor, and using technology to empower self-directed investors to manage their own investment portfolios.
Founded by John Atkinson and Ted Schrauth, INDX.GURU is a mobile application that provides users access to the information they need – presented in a real-time, easy-to-use interface – to make smarter investment decisions on companies listed on the stock market. The startup describes itself as ‘a Bloomberg-like terminal, available to everybody at a cost anybody can afford’.
There are three tabs for each publicly-listed company: overview, media and stats. The overview presents key information like share price, market movement, heat (media buzz) and sentiment (market performance), while the media tab presents links to the company’s latest media mentions. All media coverage is presented unfiltered and unbiased with over 50,000 news sources and millions of social media feeds including blogs and Twitter – all provided in real time. The stats tab presents additional statistical data like market capitalisation, trailing dividend yield, price-earnings ratio and 52-week highs and lows. The information is easy to digest because each coloured box contains that one important number – traditionally, data would be presented in graphs, spreadsheets and tables.
“Enormous effort has been put into ensuring that INDX.GURU’s user interface is genuinely ‘watchable’. Critically, INDX.guru has a user interface that doesn’t look like it was created in the 80’s. It is visually stunning, with all data being provided in an engaging way,” co-founders Atkinson and Schrauth in an email interview with Startup Daily.
“In recognition of the fact that self directed investors lead busy, normal lives and cant be glued to a screen 24 hours a day, INDX.GURU was created so you don’t have to be in front of your computer to stay up to date with changes to your portfolio. The app uses push notifications to alert you of an event in your portfolio so you know precisely at the same time they know.”
INDX.GURU’s humble beginnings dates back three years. A couple of disgruntled would-be investors thought ‘$38,000 a year is way too much to pay my financial advisors; surely there is solution that allows me to manage my investment portfolio’. This thought sent the co-founders of technology development house Scarlett Madz Media, Atkinson and Schrauth, on a technology odyssey to develop INDX.GURU. They realised very quickly they weren’t facing the problem in isolation, that other people were also frustrated with the costs involved with managing their financial affairs. In fact, studies suggest from 2008 to 2013, unfair fees made up almost half of managed fund returns, with financial advisors profiting at the expense of consumers.
“It became clear that everybody who wasn’t a Broker or a Financial Advisor and who didn’t have the benefit of sitting behind a Bloomberg or IRIS terminal all day shared the same problem – to successfully research and monitor investments in the stock market using old fashioned methods is intimidating, expensive and increasingly ineffective for the independent investor,” the co-founders said.
“The knowledge gap between the powerful global financial gorillas and the everyday investor was forever widening.”
By creating INDX.GURU, Atkinson and Schraut aren’t just solving a problem (or several problems) for themselves. The addressable market is large. In 2014, 36 percent (almost 6.5 million) of the adult Australian population participated in the share market either directly via shares or other listed investments or indirectly via unlisted managed funds, according to the Australian Securities Exchange (ASX). While a big market means big opportunity, it’s also a big challenge. INDX.GURU is entering a $2 trillion investment industry dominated by the Big Four banks and their distribution networks. However, the Scarlett Madz Media team – the 11 of them are scattered across Sydney and Perth and are experienced in many industries including alcohol, marketing, retail and technology – seem to be well-poised for the challenge.
The technology team at Scarlett Madz Media originally embarked on building their own search engine to power their idea. The search engine and a prototype of INDX.GURU was built within a year. Three years later, after significant capital investment by the co-founders, the search engine has been mothballed.
Over the years, development took many different turns, and the team built an array of proprietary technology and custom algorithms to house the investment metrics that fuel INDX.GURU today.
The co-founders stressed that INDX.GURU is market agnostic. Although Australia has been used as the test market, the platform can easily and quickly be populated with data from any market, making it a global opportunity for its users. The business model can just as easily be replicated in other markets, making it a global opportunity for the startup as well.
The overall reaction to INDX.GURU during its alpha testing phase has been very positive, according to the co-founders.
“People love the user interface and cannot believe the extent of the media monitoring. The Sentiment and Heat readings get special kudos, as does the presentation of the easily digestible financial information,” said Atkinson and Schrauth.
“The more technology-savvy tester applauded the speed in which the real time data was delivered.”
INDX.GURU launched its private beta test last month and well over 1,000 people have registered to become early adopters. Upon completion of the beta test, the startup is hoping to attract a sizable user base using three distinct market channels. Principally, through growth hacking techniques, INDX.GURU is hoping to build a loyal base of self-directed investors. These users will have the option of getting a base service, which encompasses access to news, social media, blogs, video and critical financial data on all ASX companies, for free. However, a premium and professional ‘paid’ version will be available at a later date.
The second channel involves accessing users indirectly by forming partnerships with wealth managers, broking firms and financial advisors. INDX.GURU is finalising its Advisor Assist platform which provides real-time user information to brokers and financial advisors, and designed to facilitate more relevant and direct communication between them and their customers. The startup hopes this will drive transactions and also cement customer loyalty.
The third channel involves licensing INDX.GURU content to media companies interested in providing their users/customers with an enhanced information service related to the business news section of their digital publications.
“Access to INDX.GURU for media companies will help build digital customer loyalty, reduce churn, enhance advertising revenue opportunities and create opportunities to participate in transactional revenue,” the co-founders said.
INDX.GURU has been self-funded to date, however the team is in the process of raising a Series A round to assist with growth activities and international expansion.
Thought the platform is yet to be launched publicly in Australia, Atkinson and Schrauth already have their sights set on the US market. INDX.GURU’s US content platform is well developed, and the co-founders are hoping to start working on US-based distribution partnerships towards the end of the year.
It’s unclear which fintech startup will win in this space, but it will likely be the one with the best UI/UX – that is, the UI/UX that most of the users want and feel comfortable with. Given how large the market is and how diverse stock market participants are, there is room for multiple homegrown success stories.
Featured image. INDX.GURU Sydney team. Source: Provided.