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Launch HN: Piggy (YC S17) – Investment App for India

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Re: Launch HN: Piggy (YC S17) – Investment App for India

#41

Post by fgpwd »

balladeer wrote: post #36
fgpwd wrote: post #35

I currently use zerodha for investing in mutual funds. Both offer direct funds. There are no transaction charges with zerodha coin, no demat charges either, but they do charge a flat monthly fee of Rs.50, regardless of the number of transactions or funds you invest in. With piggy, as per their website, the fee is Rs.30 per transaction for every time you buy a fund, and Rs.100 per year for every fund you SIP. RS.3 for…

You are forgetting that Zerodha needs you have a demat account and then you pay for it. Because you can't do MF with Zerodha w/o a demat account (can do so with many other brokers). Also, for this monthly charge Zerodha doesn't provide any analytics or advisory while many other direct fund providers, at a similar monthly cost, do (and couple of them won't even ask you to have a demat a/c and pay for it).

You are right. I forgot about the charges for the demat account - there are AMC charges of Rs.300 per year. So that makes zerodha coin about Rs.75 per month.

But there are no transaction charges in zerodha on buying equity (delivery) or MF. So it is still cheaper than piggy for someone wishing to make a large number of transactions or someone who doesn't want an SIP but wishes to invest manually every month.

Also, if you need a demat account for some other purpose - like investing in ETFs or equities then maybe it makes more sense for some people.

If all you are doing is an SIP with a couple of mutual funds, which is what most people around me do, piggy is probably cheaper. You can always have a zerodha (or equivalent) account for equity/ETFs/etc. and piggy for MFs.

But for someone like me with slightly different requirements, zerodha would be cheaper. I have a variable income so SIPs are not an option for me. I invest money as a percentage of my income so the amounts vary every month. In this case zerodha turns out to be cheaper despite the demat charges.

Re: Launch HN: Piggy (YC S17) – Investment App for India

#42

Post by nikhilmantha »

fgpwd wrote: post #35

I currently use zerodha for investing in mutual funds. Both offer direct funds. There are no transaction charges with zerodha coin, no demat charges either, but they do charge a flat monthly fee of Rs.50, regardless of the number of transactions or funds you invest in. With piggy, as per their website, the fee is Rs.30 per transaction for every time you buy a fund, and Rs.100 per year for every fund you SIP. RS.3 for…

Hello! Thanks for taking time to give us a detailed feedback. The pricing for all the services will remain competitive I'm sure. To start off with we made the app simple for people to use and on mobile as a lot of people would like to manage their portfolio on the go. We have received a lot of positive feedback on that.

Regarding your point on ETF you're correct. ETFs are a low cost option in the long run and are ideal for retirement. But that is primarily true in developed markets currently where it is difficult for most managers to beat the indices. In India atleast for now actively managed mutual funds are providing more returns than the index. As our markets develop we would converge with the trends of the developed markets.

Having said that we would definitely be adding meaningful products for our customers on the app! Do give it a try and let us know what you think.

Re: Launch HN: Piggy (YC S17) – Investment App for India

#43

Post by nikhilmantha »

fgpwd wrote: post #41
balladeer wrote: post #36

Earlier quoted context omitted.

You are forgetting that Zerodha needs you have a demat account and then you pay for it. Because you can't do MF with Zerodha w/o a demat account (can do so with many other brokers). Also, for this monthly charge Zerodha doesn't provide any analytics or advisory while many other direct fund providers, at a similar monthly cost, do (and couple of them won't even ask you to have a demat a/c and pay for it).

You are right. I forgot about the charges for the demat account - there are AMC charges of Rs.300 per year. So that makes zerodha coin about Rs.75 per month. But there are no transaction charges in zerodha on buying equity (delivery) or MF. So it is still cheaper than piggy for someone wishing to make a large number of transactions or someone who doesn't want an SIP but wishes to invest manually every month. Also, if…

Do take a look at the charges section in our app. We have something out there that might work for you! :)

Re: Launch HN: Piggy (YC S17) – Investment App for India

#44

Post by nikhilmantha »

navalsaini wrote: post #34

Why YC? Its an app focussed in India, I was wondering why would you need YC. It certainly must be a great experience and is a brand among people in startup world (doubt beyond it), but unless you have imminent global plans does it still make a compelling sense. And does the YC brand help you establish a trust factor in India, more than TV advertisements, or celebs like a cricketer or etc as your brand ambassador. I w…

Hi Naval.This is an extremely interesting question! Even when we were applying, we didn't think from this angle! :)

Why YC made sense to us was because of it's network of super smart people who have seen a lot, done a lot. We want to build a really good product that solves a big pain point in India. YC helps tremendously in building good products with it's people and resources at hand. Also it is a great environment for founders to learn things in a concentrated way beyond tangible sources such as books, videos and blogs. It becomes like a bootcamp for us. In the end founders are people who need to keep up to build a great company! :) YC gives a jumpstart. All the trust building with customers will come by providing a great service first, then by all the traditional and non traditional media means.

Re: Launch HN: Piggy (YC S17) – Investment App for India

#45

Post by nikhilmantha »

balladeer wrote: post #38
nikhilmantha wrote: post #29

Earlier quoted context omitted.

Thanks a lot Amruta! You are absolutely right. MF industry has reached $300B assets with just under 1% population investing while over $800B sit in bank assets. The penetration is super low. We are definitely looking to educate our users in creative ways. First we focussed on building a simple app to sign up and use and create a seamless platform for transactions. Now we have big plans to build over this platform. Th…

I have working for around 7% and my 100% savings sit in PPF, FD and now recently started in NPS. I really never felt comfortable with any service with which I can have complete control and freedom to transact. I had tried IIFL back in the day and after 3 months putting decent amount of money I wanted to sell some SUZLON shares one day when the price was at 5x of what I had bought at. Transactions failed, kept failing…

Hello balladeer! We do understand your concerns. The industry infrastructure needs a lot of upgrade especially the funds industry. Also the payment gateways need to improve a lot.

Infact this has been our prime focus at Piggy. We have been optimising and automating our operations as much as possible to ensure that the users never face any trouble. And we completely support our customers with any issues and sort them out as we work closely with the exchanges and other intermediaries.

Re: Launch HN: Piggy (YC S17) – Investment App for India

#46

Post by fgpwd »

nikhilmantha wrote: post #43
fgpwd wrote: post #41

Earlier quoted context omitted.

You are right. I forgot about the charges for the demat account - there are AMC charges of Rs.300 per year. So that makes zerodha coin about Rs.75 per month. But there are no transaction charges in zerodha on buying equity (delivery) or MF. So it is still cheaper than piggy for someone wishing to make a large number of transactions or someone who doesn't want an SIP but wishes to invest manually every month. Also, if…

Do take a look at the charges section in our app. We have something out there that might work for you! :)

I saw that; free transactions forever on 5 referrals till 20 aug - that is very clever. The app is also very well designed. Congrats!

Re: Launch HN: Piggy (YC S17) – Investment App for India

#47

Post by nikhilmantha »

balladeer wrote: post #39
nikhilmantha wrote: post #10

Earlier quoted context omitted.

Hey Nikant! When you invest Rs.10000 with Scripbox, they take 0.5-1.5% commission on that investment every year as long as 10000 remains invested and to whatever that amount grows to. So you are paying compounding commissions. Most Indians aren't aware of this. We don't take these hidden commissions. We charge a one time fee. Also Scripbox offers a limited set of funds while we offer products from all fund houses. So…

A point to be noted here is: Scripbox keeps getting that commission even after you have left Scripbox and stopped using it. Same with FundsIndia etc. I would say, avoid any MF that is not direct. the long term hidden cost is staggering. @Nikhil Congrts and just a feedback: I would have been very much interested if you had a monthly fee plan like Zerodha Coin and also offered advisory and analytics like Invezta, ORO e…

Do take a look at the charges section in our app. We have something out there that might work for you! :)

Also We focussed on building an easy to use app with seamless transaction platform that supports all fund houses first. The cake is in place. We will be adding a lot more over this.

Thank you for taking time out for all the detailed feedback!

Re: Launch HN: Piggy (YC S17) – Investment App for India

#48

Post by nikhilmantha »

balladeer wrote: post #40
nikhilmantha wrote: post #14

Earlier quoted context omitted.

Hello esteer! Thanks for your question. Important Difference. 1. Coin is based on Zerodha's kite platform and requires a demat account for investments. There are multiple disadvantages of using a demat account for mutual funds, one of them being transaction costs on every transaction from demat as well. The others are difficulty in estate planning and also your movement options to other services would be restricted i…

You don't have a web portal? Also, could you please expand upon demat disadvantages? How much is that demat txn charge? I think it's kinda insignificant. Also, from a user point of view, if one has a demat account with Zerodha they can also do stocks with the same account without having to pay for demat again with another provider, right?

Our web is getting built as we speak. It should be up soon enough.

We focussed most of our efforts on mobile till now because as a country we skipped desktops and jumped to mobile first.

Regarding demat for Mutual Funds let's look at it this way. NonDemat MutualFunds is also paperless and you get consolidated mutual fund statements nowadays. So there is no additional advantage of investing in only funds via Demat route plus you have to pay for it.

Less than 1 % Indians have participated in capital markets and mostly through mutual funds. So at this point our focus is on keeping things simple.

Re: Launch HN: Piggy (YC S17) – Investment App for India

#49

Post by nithinkamath »

Guys, Firstly congrats. The app looks sweet. With all the Coin by Zerodha talk happening, my keyword alert engine has been buzzing. I couldn't keep quiet. :)

About buying mutual funds or anything else in demat form, anyone who has used demat accounts will know is a lot more convenient. Yes, Franklin will come soon, but almost all the others are already there. Setting up SIP without NACH, flexibility to move from one demat to another, single portfolio view across all asset classes, easy inheritance to nominee/dependents and more. But yeah, this is up for debate. :)

My question for you though is a little tricky, and I am asking this to every startup building a business around MF in India -especially the direct MF kinds.

How will the business make money?

For Zerodha, selling MF is not the main business. After getting to 150 crores of AUM in 2.5 months selling direct MF (maybe the fastest any online platform has gotten this much AUM ever in India), I am not sure if there is a viable standalone business model to run this at Rs 50/month or say Rs 30/transaction or even upto Rs 2000/year that some other direct MF platforms are charging. I can run it because MF contributes to less than 0.5% of our business and there is no acquisition cost or running cost since this is extension to how we settle stocks in demat. If cost of acquisition is between Rs 500 to Rs 1000 (considering minimum advertising/salary and doing full KYC), and you take 1 to 2 years or more to just recover that cost. How will the business sustain? Is the plan to sell advisory at a higher fees like others, if yes how much?

Have been in this for 20 years, I can also tell you that when markets starts to trend down, people stop investing. Won't your transaction fees model put stress on your balance sheet then?

Re: Launch HN: Piggy (YC S17) – Investment App for India

#50

Post by navalsaini »

balladeer wrote: post #37
navalsaini wrote: post #34

Why YC? Its an app focussed in India, I was wondering why would you need YC. It certainly must be a great experience and is a brand among people in startup world (doubt beyond it), but unless you have imminent global plans does it still make a compelling sense. And does the YC brand help you establish a trust factor in India, more than TV advertisements, or celebs like a cricketer or etc as your brand ambassador. I w…

I am not sure but maybe the people who later might help this company or required for its success - future VCs, top talents they would want to hire, press coverage and all - might be influenced by the YC tag and it might work for Piggy in this way. And the YC networking as they say.

I do think it would help in hiring tech talents and maybe also with raising future rounds at high valuations. I know more about the first than the second.

Also it does make me happy to see more Indian startups being a part of YC.

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