500 Startups funds Stockbit, a social network for stock trading
In this article (5)
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
“You can allocate a fixed amount, say US$5,000, and this amount will be invested by mirroring the person you are following.”
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.
Questions & Answers
Q.What is the purpose of the new feature Stockbit plans to launch?
What is the purpose of the new feature Stockbit plans to launch?
The new feature will allow community members to automatically copy investment moves of more experienced traders. This aims to simplify investing for novices, letting 'leaders' handle the trading decisions.
Q.How will the 'leaders' who are followed on Stockbit benefit from this new feature?
How will the 'leaders' who are followed on Stockbit benefit from this new feature?
Trading 'leaders' will receive a share of the profits made by the users who follow them. This provides an incentive for experienced traders to participate in the automated copying system.
Q.What is the current state of stock market participation in Indonesia, according to the article?
What is the current state of stock market participation in Indonesia, according to the article?
Less than 0.3 percent of the adult population in Indonesia has a stock trading account, which is significantly lower than in Singapore or China. Stockbit aims to address this knowledge gap.
Q.How does Stockbit compare to other trading information sites or potential competitors mentioned?
How does Stockbit compare to other trading information sites or potential competitors mentioned?
Other sites like Idsaham or Infovesta mainly aggregate stock information without analytics. Bareksa offers financial analytics, while Algomerchant allows subscriptions to trading algorithms, not individual people.
Reader pulse
Will Stockbit's new copy trading feature significantly boost adoption?
17,494 votes so far