
Launch HN: Piggy (YC S17) – Investment App for India - nikhilmantha
Hey HN! This is Nikhil here with Ankush and Kunal. We founded Piggy (<a href="https:&#x2F;&#x2F;piggy.co.in&#x2F;" rel="nofollow">https:&#x2F;&#x2F;piggy.co.in&#x2F;</a>), an investment app for Indians. Think of it as a mobile-first Vanguard for India. With Piggy you can invest in mutual funds, track your investment portfolio and save for retirement.<p>Historically, public sector employees vastly outnumbered private sector ones in India. Those public jobs came with pensions, so no one had to think about investing their own money. In 2016, for the first time, the private jobs overtook the public. People have to invest their own money now, and it&#x27;s complicated and expensive. We built Piggy to help solve those problems.<p>This new Indian middle class is searching for good places to invest, which is why the mutual fund market is growing so quickly - assets grew by 40% in just the last year to $300B. Every one of these new investors has a smartphone, which is why Piggy is mobile first.<p>The app has quick online account setup, easy to use interface, built in user support (in app chat, email and call). Users can access all the fund houses in a single app. Transactions cost less than $10 a year and there are options for lowering that cost. The app charges a flat fee of 50 cents per buy transaction. We take no hidden commissions from asset management firms, unlike most services in India. Saved commissions mean higher returns for our users.<p>Ankush and I have fixed income analytics experience at an investment bank, and Kunal has worked with Amazon. When we started working, we got limited advice from our family on where to invest, mostly in traditional bank-based saving products with low returns. We also saw many of our friends fall prey to bad financial products. When we did learn about mutual funds, there was nothing out there that was easy to sign up and use, that didn’t charge a bomb or hidden commissions. We got together over many late night conversations and decided to build it ourselves.<p>We’d love to answer your questions about Piggy and love to discuss fintech in India and emerging markets!
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fgpwd
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 every time you buy a liquid
fund.

So piggy turns out to be cheaper for most people who would start an SIP with
2-3 mutual funds. Since I guess most people won't have needs that extend
beyond this, piggy is probably the cheapest platform to buy mutual funds.
However, for someone expecting a larger number of transactions or SIP with
more than 6 funds, zerodha would turn out to be cheaper. Also, if instead of
an SIP, for some reason you wish to invest a different amount every month,
zerodha would turn out to be cheaper.

A big advantage of having a zerodha account is that I can also invest in index
ETFs which I feel are much safer than mutual funds for the long term. Index
mutual funds have very high expense ratios of more than 1%, but in comparison
the index ETFs have lower expenses, like the NIFTYBEES etf has an expense
ratio of just 0.1%. The SBI NIFTY etf has an expense ratio of 0.05%. There are
no exit loads or transaction charges. These are passive funds that just track
the basket of companies in the NIFTY index.

I think index ETFs should also form an important portion of a person's long
term/retirement investment portfolio, apart from mutual funds.

~~~
balladeer
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).

~~~
fgpwd
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.

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

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

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amruta2799
Sounds interesting! I have been researching the investment apps here in the
US, and was waiting for a similar solution back home in India. I think it's
about time Indian investors get the technology-backed investing experience.
Well done guys!

My two cents: AFAIK, Indians still believe in traditional investment methods
like bank deposits and gold. Along with providing the facility to diversify
their investments, you will also need to educate your users about investing
basics (which I see you already do in your FAQs), why they should diversify,
is it safe to invest in mutual funds, and how the traditional mutual funds
system operates (demat accounts, fees, etc). In short, why they should
diversify and why should they choose you. Because people are normally driven
away by the confusing and overwhelming fine print materials, you have an
opportunity to not only provide an easier investing method, but also an easier
self-educating method for your users. Make the most of it :)

~~~
nikhilmantha
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. Thanks again for your encouragement! :)

~~~
balladeer
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 throughout the day. 7 days later I got a one line
response saying it was a glitch. Exited after few days and closed the account.
Never went back to trading again.

I mean I see the numbers and % of returns I will get but how can I trust the
industry where interfaces, that I want to be in that industry, are so
unreliable.

~~~
nikhilmantha
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.

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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?

~~~
sinanku
Thanks Nitin for your inputs and we are really inspired by Zerodha and your
success. Re Business model we are working on it. It is still early days.

~~~
nithinkamath
Thanks & Best of luck

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yumraj
If you want people to trust you with their money, you need to tell me more
about yourself. There is no mention, at least none that I could find, about
the Team, what is their background and why should I trust them.

~~~
nikhilmantha
Fair point Yumraj! We will definitely do so in future updates of our website.
We have been in ultra stealth mode before coming to YC. Till date we have
acquired all our customers organically. The quality of our service has
primarily brought that trust in our users who have invested millions of $ via
the app.

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nikhiljoisr
Superb concept and I love your Android app's design. What is your target user
base and who are your power users?

~~~
nikhilmantha
Thanks Nikhil! Really appreciate the feedback.

Our current target audience are working professionals between the ages of
25-35. A lot of them invest in substandard products and get ripped off or just
let their money lie in their bank accounts

Having said that we get users from a wide spectrum from older business
professionals in small remote towns to students looking to start saving early.

Our power users understand various kinds of mutual funds, basics of asset
allocation and know that direct plans will definitely earn more returns. These
users would love Piggy's ease of use, automated portfolio tracking and
powerful search and filter options.

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navalsaini
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 would certainly want to YC, if I had a product that I want people in
US/Canada/Europe to use.

~~~
balladeer
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.

~~~
navalsaini
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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jameshk
Congrats on the launch -- What is the biggest legal or regulatory problem
you've experienced so far or will with future growth?

~~~
nikhilmantha
Thanks a lot jameshk! Currently there aren't any major roadblocks from a
regulatory point of view. Infact the Indian market regulator is bringing forth
many forward looking regulations and introducing the concept of fiduciary
responsibility in India.

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harshdeep
I have not been to your site yet, but without much of analytics isnt it same
as MFUtility which happens to be free and provides direct investment option as
you do?

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calvinbhai
What protections do investors have? Stock trading apps in US are part of FINRA
and SIPC. Anything similar with Piggy?

~~~
sinanku
Hey, Investors protection in India is enforced by SEBI (Indian capital market
regulator). AMFI is the self-regulatory body to enforce regulation and
adherence to codes in mutual funds Industry in India.

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ing33k
Nice !

how is the the KYC done ? ( what documents are needed )

how much time does it take to get the account setup ?

any plans on creating a web app ?

~~~
nikhilmantha
Hello ing33k! Thank you!

Account opening is completely online. We need your PAN card, Address Proof,
Photograph, Signature on app and a Bank account proof.

Since we do the full KYC it will take upto 3 business days for your account to
be active.

For an existing KYC user the account is activated on the same day.

The web app is getting ready as we speak! It should be live in a week.

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nikant
How is this different than the already available solutions in the market like
Scripbox?

~~~
nikhilmantha
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 even an expert user would be able to use us and wouldn't be
limited by an algorithm.

~~~
balladeer
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 etc. They all offer direct plans.

~~~
nikhilmantha
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!

~~~
balladeer
Tried registering. Not sure I am registered or not yet. Was entering correct
OTP and I remained on same screen w/o any measage or feedback. Whenever
changing between apps the filled registration form will be cleaned.

And password length only 12 max? That's serious.

Looks like the app is still in beta or alpha. Anyway good luck. Not the time
to put my money there yet. It's just a feedback and I am talking about iOS
app.

~~~
nikhilmantha
Thanks! We'll look into it. Try our Android app if you can. That is up to
date. iOS app will be up to speed soon.

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esteer
Why should I use Piggy over Coin by Zerodha? What are the important
differences?

~~~
nikhilmantha
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
if you don't like Zerodha services. 2\. Try searching for popular Franklin
funds on Zerodha! :) 3\. Piggy is mobile first.

Would love more feedback from you!

~~~
esteer
Hey, sorry for the delayed response. In case you see this, do you have any
data that I use to compare the costs involved by investing through Coin vs
Piggy? Also, since you're a start-up I'd be a bit concerned to give my money
with doubts what'd happen if you shut down. How can I make sure my investments
are secured even if you shut down?

~~~
nikhilmantha
Hello! We have an offer running currently where when you invite 5 friends to
complete sign up through us then all transactions via Piggy are free for you
for life.

Also regarding your investments. They are all in your name. You get the final
allotment statements directly from the fund houses to your email. You can also
generate consolidated investment statements by yourself. So in absence of
Piggy you can still buy and sell your investments. We've just made it easier
for you to do so.

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dxbydt
Can non-Indians invest via Piggy ? What currencies do you accept ?

~~~
nikhilmantha
Hey dxbydt! Thanks for showing interest! Non Indians can invest with us if
they have an Indian PAN card (Tax number) and an Indian Bank account (NRE/NRO
type).

~~~
nikhilmantha
Also our investments can be currently only in Indian Rupees. All these are
based on regulations by the Indian Markets regulator 'Securities Exchange
Board Of India' or SEBI

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honest1122
Hey, when are you starting to put CRISIL rating for the schemes?

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sinanku
Hey, We'll consider adding it in future releases of the app. Thanks,

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n3x10e8
Do you offer Aadhar based e-KYC?

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nikhilmantha
Hello n3x10e8! We don't do that as that would limit you to an investment of
Rs.50000/ fund house/ year. Plus there is lack of clarity around acceptance of
Aadhar based e-KYC based on the new central KYC regulations. We do the full
KYC for you which then has no restrictions for you.

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ganlad
There's no link to your product in the post.

~~~
nikhilmantha
Www.piggy.co.in

~~~
nikhilmantha
Thanks for pointing out! :)

