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  • 500 Startups funds Stockbit, a social network for stock trading

    500 Startups funds Stockbit, a social network for stock trading

    Indonesia’s Stockbit bills itself a “social network for stock traders.” Individual traders sign up for customizable stock market information and analytics. Basic features are free, while paying subscribers get more in-depth intelligence.

    The site’s been growing and adding features since 2012. The company just closed an investment from 500 Startups, it said in a release today. It’s a pre-series A round, and the sum is undisclosed.

    The new investment is supposed to fuel the launch of a new a feature that lets community members follow more experienced stock traders and copy their investment moves in an automated process.

    “Our proposition is simple. Just copy, let the best do the rest,” is how CEO Wellson Lo explains the feature. You can allocate a fixed amount, say US$5,000, and this amount will be invested by mirroring the person you are following. Trading “leaders,” as the people you can follow are called, also benefit. They get a share of the profits you make.

    It’s been in development since last year and will become available on Stockbit’s iOS and Android apps soon, though there’s no set launch date yet.

    Traders wanted

    Public participation in the stock market is extremely underrepresented in Indonesia, argues Wellson. Less than 0.3 percent of the adult population have a stock trading account. In Singapore, it’s 39 percent and more than 20 percent in China.

    Part of the reason is a knowledge gap, which Stockbit hopes to address by making it simple for novice traders to learn and reap benefits without risking too much.

    Back in 2015, after Stockbit last raised funds, including from local VC firm Ideosource, Wellson had told Retail News that the startup had 15,000 registered users, while paid subscribers were still only in the hundreds. The user base has about tripled since then, according to Stockbit.

    There’s an ongoing effort by the Indonesian Financial Services Authority to raise awareness about investment opportunities on Indonesia’s public markets, a development Stockbit hopes to be able to leverage for its growth.

    500 Startups partner Vishal Harnal says Stockbit is already the largest and most active community of stock traders in the country, which gives the startup an advantage over potential competition.

    Besides Stockbit, there are trading information sites like Idsaham or Infovesta, but those sites merely aggregate stock information and don’t yet offer analytics tools. Bareksa can be seen as a possible competitor, as it offers a variety of financial analytics tools and also aggregates information about the Indonesian Stock Exchange, among other functions.

    Algomerchant from Singapore has a similar solution, offering a mix of social networking and analytics. However, Algomerchant lets you subscribe to a set of trading algorithms, not individual people, explains Wellson. Stockbit’s social trading model is most comparable to Covestor in the US.

  • Indonesia’s Stockbit gets seed funding from Ideosource

    Indonesia’s Stockbit gets seed funding from Ideosource

    Stockbit is a financial analytics platform that helps Indonesian traders understand and share information about the local stock

    market in real-time. Earlier today it announced a seed investment of an undisclosed amount from local VC firm Ideosource.

    The startup was founded in 2012 by Wellson Lo, who previously worked for consulting firm KPMG Singapore and as a trader, and Johny Susanto, a full-stack engineer. Stockbit started out as a social network that attempted to bundle the discussion about Indoneisa’s stocks into one place. “Previously, it was scattered all across Twitter, forums, and blogs,” Wellson explains.

    At the end of 2013, Stockbit added analytics features. The data comes from public sources like the Indonesian Stock Exchange (IDX). The problem with the available data, Wellson says, is that it’s not standardized. Stockbit aggregates this data and makes access to it quicker and more reliable.

    At the same time, Stockbit started to monetize through a freemium subscription model. The price for a one-month subscription is IDR 200,000 (US$13.59). In comparison, professional tools like the Bloomberg Terminal cost US$2,000 per month, the firm says.

    Stockbit’s goal is to make life easier for independent or retail investors by giving them access to high-quality financial data and sophisticated analytics tools at an affordable price. The idea is to create a more level playing field between newcomers and institutional investors, including traders from banks, insurance companies, and pension funds.

    “I found that the information gap between retail investors and institutional investors is very big,” says Wellson. “It’s never going to reach the point where it’s really level, but with better tools to analyze and better collaboration, retail investors can make better trading decisions.”

    To date, Stockbit has 15,000 registered users, while paid subscribers are still in the hundreds. According to Wellson, the figures are a result of the small size of the addressable market.

    “In Indonesia there are only 400,000 registered investors, probably of those [only] 100,000 are retail investors,” he says. “That means more than 10 percent of the addressable market is already using Stockbit.”

    Stockbit targets a narrow market, and that’s the big reason founders faced difficulties raising funds until now. Ideosource’s decision to back the venture is based on a commitment by the Indonesian Financial Services Authority to increase the number of retail investors to five million by 2017.

    Wellson says there are government outreach programs that work with schools and companies that encourage more people to consider investing in the capital market.

    Stockbit has several competitors in Indonesia, including Idsaham, Indonesia-Investments, and Infovesta. However, those sites merely aggregate stock information and don’t yet offer analytics tools. Bareksa can be seen as a possible contender, as it offers a variety of financial analytics tools and also aggregates information about the IDX, among other functions. It also recently opened up its online platform for trading mutual funds.

    The Stockbit team plans to spend the fresh capital on building out the product, which includes making mobile apps for Android and iOS, as well as recruitment and marketing.

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