The process of investing looks very different for a High Net Worth Individual (HNI) and someone looking to invest smaller amounts. For HNIs there are banks and investment firms, brokers and brokers. However, the smaller boys are largely left to their own devices to make (usually uninformed, or at least semi-informed) investment decisions.
A major reason retail investors don’t make much money in the stock markets is a lack of proper, informed, and researched guidance. For example, in a traditional setup, portfolio managers continually re-evaluate and adjust the price of the assets they manage for investment purposes. Individual investors either don’t know how to interpret these signals or don’t know how to react to them, thereby missing out on lucrative investment opportunities.
wants to change that.
Founded in 2016 by Sumit Chanda, JARVIS is an artificial intelligence platform providing comprehensive, tailored and personalized investment services to retail investors. It caters to people who have Rs 30,000 to Rs 1 lakh to invest and it performs all the functions of a traditional investment bank, including asset reallocation and risk management.
“JARVIS was founded with the aim of removing the limitations of the traditional participation model,” says Sumit.
These limitations were mainly the lack of access to personalized investment advice, the influence of human emotions and prejudices during investing, the lack of a risk management system and a unified approach.
JARVIS manages to overcome these limitations through its artificial intelligence, which uses the reinforcement learning model to get smarter and smarter over time.
Today, the AI platform leverages 1.2 million local and global data points to determine investment outcomes and make decisions, Sumit says.
How it works
JARVIS Invest, the startup’s retail investor-focused platform, subjects each user to a quick 10-question risk assessment test to gauge their risk appetite, then assigns them to one of six risk profiles (ranging from risk-averse to very aggressive).
The platform then creates a personalized portfolio of stocks and other financial instruments based on the profile and real-time market movements.
“Each portfolio is unique to the needs of the user, everything is created in real-time. The same user can receive two different portfolios at two different times of the day depending on real-time market conditions,” says Sumit.
The AI then continues to track the portfolio’s performance – much like an investment manager would – and recommends rebalancing when it deems it necessary. It also provides users with real-time advice on profit posting, fractional profit posting, exits and portfolio resends. The user only has to accept or reject any recommendation or trade.
According to Sumit, to date, the portfolios curated by JAVRIS have achieved average returns of 50% to 80% across all portfolio categories. His risk management skills were recently able to predict the market crash in March 2020 and January 2022.
Most of JARVIS’ early adopters are millennials between the ages of 25 and 40. The platform has over 85,000 clients and has exceeded Rs 100 crore in assets under management.
business model
JARVIS charges users about 2.5% of their total portfolio, similar to a portfolio management service. Users pay 1.25% on onboarding and 1.25% after six months on real-time portfolio value.
The startup says it has yet to break even — it expects to do so by FY24-25.
JARVIS has raised nearly $600,000 in funding from a family office in Dubai to date. The company was bootstrapped until October 2021, after which it raised a $1 million pre-series round from BNP Investments.
The platform has generated 50,000 personalized portfolios, it says. It processes around 2,000 transactions daily, including new portfolios, rebalancing, and general stock purchases and orders. His DAUs are around 3,000 to 3,500.
In the coming months, the Mumbai-based startup plans to expand its operations to the UAE markets. It eventually wants to expand to other Middle Eastern countries as well as the United States.
JARVIS competes with Blackrock’s Aladdin, IDFC AMC and SmartMoney Investment Advisors, although there are some differences between the companies’ models. According to Sumit, JARVIS is India’s first AI-based advisory platform for private investors.
startups like , trading rooms of RAIN Platforms Inc, , , and also perform similar functions to JARVIS – recommend stock purchases and build personalized portfolios for retail investors at affordable prices.
According to data from the National Stock Exchange (NSE), the share of private investors in companies listed on the NSE has reached an all-time high. Retail investors held Rs 19.16 lakh crore in listed companies as at 31 March 2022 compared to Rs 19.05 lakh crore in December 2021.
