SUMMARY
Vested Finance will be using the fund to enhance its product development and expand its team across India and the US
The seed round witnessed participation from both Indian as well as US-based venture capital firms
In 2020, Vested Finance claims to have witnessed 26x growth in money deposited, along with a 5x increase in the US brokerage accounts opened through the platform
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With the recent buzz around traders on Reddit making a huge statement with the GameStop stock and countering Wall Street short bets, many Indians are looking at avenues to invest in the US stock market. Bringing these US stocks as well as more lucrative ones such as Tesla or Apple to Indian retail investors, Mumbai-and California-based online investment platform Vested Finance has raised $3.6 Mn in seed funding from US-based venture capital firms Moving Capital, Ovo Fund and TenOneTen Ventures.
Indian early-stage funds such as Inflection Point Ventures and Venture Catalysts also participated in the round.
The company said that it will be using the funds to enhance its product development and expand its teams in India and the US.
Vested Finance was founded by Viram Shah, Darwin Arfin, Eric Huynh and Ynghan Lin in 2018. The company is a US Securities and Exchange Commission (SEC) registered investment adviser (RIA) that offers an online investment platform for Indian investors to invest in the US stock market. The platform also works like any other zero-commission or brokerage investing apps like Zerodha, Paytm Money and 5paisa and others but the only difference here is that the retail investor can diversify their portfolio by investing in foreign companies/stocks outside India without jumping through hoops.
The company has also partnered with DriveWealth, a US-SEC-registered broker, which claimed to serve clients in 150 countries and is a member of the Securities Investor Protection Corporation (SIPC), which insures securities in their customer’s accounts up to $500K. Besides DriveWealth, it also claimed to have partnered with local banks and other fintech companies such as ICICI Direct, HDFC Sec, Kotak Sec and Reliance Money to lower barriers to international investing.
How Vested Finance Online Investing Platform Works?
Cofounder Shah claimed that the interest in the opportunity to invest in US stocks is strong and increasing. “Individuals in India have contributed to the top and bottom line of international companies for decades, but have never had the chance to create wealth by investing in them,” he added.
In 2020, the company claimed to have witnessed massive growth, with 26x growth in deposits in the year, along with a 5x rise in the US brokerage accounts opened through the platform. Till date, the company claims to have processed over $100 Mn through trades.
According to SimilarWeb, at the time of writing, the website had recorded 100K monthly page views, giving us an indication that Indian investors may need to be educated about investing in foreign stocks. In comparison, Zerodha, which is the largest digital stockbroking platform in India, sees over 45 Mn monthly visits.
The nascent stage of US stock market investments from India is indicated by the fact that more than half of Vested Finance investors are investing in the US for the first time ever. The company said that the Indian investors can choose individual stocks or ETFs, or select from a variety of portfolios curated by its team.
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