Personal Finance Startups in India – All closing down?
I am from India and believe in India’s growth story. The startup community is thriving and many new companies are started everyday. Personal finance is one area where we have seen a handful of startups trying their luck. Unfortunately many of them have failed and closed shop.
I remember going to a startup conference about 3 years back where I saw the stall of a personal finance company called MoneyVidya. This was an Indian stock picking community. You can pick stocks and build a portfolio. Your portfolio will then be up for comparison with everyone else’s portfolios. Members were rated based on their portfolio performance. The website was shut down soon after starting.
After this we heard paisa.com closing its shop. Last year MoneySights.com also shut down.
Yesterday we got the news that InvestoPresto also closed their website.
All these websites had a few things in common:
- All focused on stock trading game with a social element
- They couldn’t generate money
- User interest was low
My only question is why the new startups such as InvestPresto couldn’t learn anything from their peers who were already struggling or had closed down.
One thing that we need to understand is that a startup should solve a real problem not just a fancy desire. In the real world, we have real world stock trading. So, why would a sincere investor spend his time on playing a stock trading game? Someone who is playing the game is not very likely to share his real portfolio creating a disconnect in real vs. virtual trades.
A stock trading game can have only one real purpose – to teach beginners how to trade. But the beginners cannot be trusted with stock picking, right? I would really like to understand how these companies focused on stock trading game as a basis for stock picking and money making.
This doesn’t mean that personal finance scene in India will not see any more startups. It’s a growing area and we will see many more companies. In my opinion, any website that works in this space will have to keep content as one of the primary forces to drive revenue. People want to earn real money, not fake money. So, create a business that will really help people grow their money. It could be providing tips and advice, tools to manage finance or screen investments, or offer convenience.
Share your ideas on what could work in personal finance and stock trading space.