Social media modified the whole lot from information consumption to buying. Now, Dub thinks it will possibly do the identical for investing by means of an influencer-driven market the place customers can observe the trades of prime buyers with a number of faucets. Consider it as TikTok meets Wall Road.
Based by 23-year-old Steven Wang — a Harvard drop-out who started investing in second grade together with his dad and mom’ blessing – Dub is betting the way forward for investing isn’t about choosing shares however choosing folks. The app permits customers to observe the methods of merchants, hedge funds, and even these mimicking high-profile politicians. As a substitute of constructing particular person commerce selections, Dub customers can copy whole portfolios.
The idea has struck a chord. Dub has already surpassed 800,000 downloads and raised $17 million in seed funding – with a brand new spherical seemingly within the works. Much less clear is whether or not Dub can keep away from the pitfalls of earlier fintech startups.
Impressed by GameStop
Retail investing has developed dramatically over the previous twenty years. The times of $7 buying and selling commissions and clunky brokerage interfaces have been blown aside roughly a decade in the past by mobile-first platforms like Robinhood that invited folks to commerce free of charge. On the similar time, social media is reshaping how folks, and significantly members of Gen Z, make monetary selections.
As a Harvard scholar in the course of the pandemic — one who was buying and selling from his dorm room “since you couldn’t actually do something at college” — Wang got here to consider these two traits, retail investing and influencer-driven decision-making, have been on a collision course. Between the GameStop saga, Elon Musk’s potential to “transfer the Dogecoin and Bitcoin markets with each tweet,” and other people’s willingness to “actually observe concepts and people to a complete new stage,” Wang determined to drop out in 2021 and begin constructing Dub.
Proper now, the platform’s common person is between 30 and 35, says Wang, although New York-based Dub is clearly discovering its approach in entrance of a good youthful viewers. In current weeks, this editor’s 15-year-old has requested greater than as soon as about “investing like Nancy Pelosi” after marinating in Dub advertisements on Instagram.
Pelosi isn’t personally buying and selling on Dub; it’s only a dealer on the platform mirroring her disclosed strikes. Nonetheless, the thought has caught fireplace. “Nancy Pelosi is up 123% on Dub with actual capital,” says Wang, “and we’ve made our clients thousands and thousands of {dollars} since that portfolio was launched on the platform.”
Dub isn’t free. Wang was decided to generate income from the outset, and Dub does that right now by means of a $10-per-month subscription mannequin. Wang says additional that some “prime” portfolios on the platform cost administration charges and Dub takes a 25% minimize of these charges.
Within the meantime, Dub has scaled partly by means of natural development. “Creators who’re good merchants on the app are incentivized to convey their viewers,” says Wang, whose dad and mom immigrated from China and who grew up in Detroit.
Dub can also be investing aggressively in promoting, leaning closely into Meta advertisements particularly to amass customers, together with on Instagram. “We’ve been actually fortunate the place I believe the broader American inhabitants actually believes there are different folks on the market which have an edge over them in terms of the investing world,” says Wang.
Preventing phrases
The query now’s whether or not Dub will observe an analogous path as different fast-growing fintech startups, a lot of which have discovered themselves within the crosshairs of regulators. Robinhood disrupted finance by making buying and selling free, but it surely additionally confronted regulatory scrutiny forward of its 2021 IPO, finally ditching a function that showered customers with digital confetti each time they made a commerce.
Dub says it’s eager to keep away from the identical errors. The corporate spent greater than two years working with FINRA and the SEC earlier than launching, making certain its mannequin complied with monetary rules. “We didn’t simply navigate regulation at Dub — we embraced it,” Wang says. (Like Robinhood, Dub is a completely licensed broker-dealer.)
A giant distinction, argues Wang, is that Dub is designed to teach customers, not simply encourage blind hypothesis. The platform shows threat scores, risk-adjusted returns, and portfolio stability metrics to assist buyers make knowledgeable selections, he says.
He suggests it’s safer for buyers than Robinhood. Says Wang: “I’ve a whole lot of respect for what [CEO] Vlad [Tenev] has achieved in making buying and selling free. However on the finish of the day, making it tremendous straightforward to commerce with out knowledgeable steerage, with out training, is de facto simply playing for the broader inhabitants.”
To underscore his level, Wang factors to the choice of Robinhood — together with Coinbase and different exchanges — to make the meme coin TRUMP accessible for purchasers forward of President Donald Trump’s inauguration. Whereas it initially surged in worth, its worth has plummeted since. Says Wang, “I believe essentially the incentives are simply misaligned between these massive platforms which are public firms now that have to generate income” and that “typically” their clients have “most likely misplaced cash.”
(Price noting: in a separate, current dialog with Robinhood’s Tenev about Dub, Tenev proposed to TechCrunch that duplicate buying and selling may change into of higher curiosity to regulators, and that Dub might not but be beneath the “magnifying glass” due to its comparatively smaller measurement.)
Both approach, not everyone seems to be bought on Dub’s imaginative and prescient. The largest knock towards such platforms, says critics, is that inventory choosing underperforms passive investing over the long term, with research exhibiting that almost all actively managed funds fail to beat the S&P 500.
It’s a criticism with which Wang is acquainted — and on which he’s fast to push again. For one factor, he argues that many such research are “cherry-picked.” (“I guess a whole lot of these are sponsored by the passive investing index firms,” he says.)
Additional, says Wang, there’s a cause that actively managed hedge funds like Citadel are thriving. “For those who take a look at what the extremely rich can do, they’re giving their cash to Ken Griffin of Citadel, [because] they’re persistently placing up non-correlated returns 12 months after 12 months after 12 months,” he says.
If yet another broadly “seems on the development of the hedge fund area and the asset administration area,” continues Wang, “there’s a cause why it’s rising. It’s as a result of they’re being profitable for his or her clients.”
