In India, the younger working population is getting smarter about their finances. A survey conducted last year, by Tata Capital, showed that those in 18 to 25 age group work towards their financial security — nearly 40% save a quarter of their salary and more than 14% put away half. That’s commendable restraint. The problem lies in how they grow their money. A large percentage (66%) still seeks the advice of family and friends; and most of them choose bank deposits and mutual funds, over equity. That is, they are led by trust and safety, and not by financial literacy and independence.
To be fair, it is not easy to invest in equity. Even if a person masters the endless jargon — rummaging through annual reports, filings, stock calls and financial statements to find a company right for your money is an uphill task. That is why a start-up like Tijori, founded in 2017, is helpful. Siddharth Hegde, Varun Marda and Tejas Goenka started the company keeping themselves in mind.
While Hegde and Marda are working on it full-time with a team of 20, Goenka is also the managing director at Tally Solutions, India’s largest accounting software company, which is funding Tijori Finance. “We had been investing since 2011 and have always found the process cumbersome and difficult to manage,” says Hegde. The Bengaluru boys, friends since childhood, have had to research for months into a company before deciding on putting (or not putting) their money into it.
“We felt there had to be a better way,” says Hegde. For a year, they tried different investing formats, which included corporate bonds and micro savings and, finally in 2018, they came up with this investing platform. “The decisive moment was when we were speaking to a big shot corporate leader, and realised that he invested his hard-earned cash into direct equities, without any first-hand research,” says Hegde. He had decided based on hearsay and half-baked information that came through the grapevine. Tijori’s purpose is to structure unstructured data around a company, and give investors usable information. They run algos through important financial documents to find relevant information that would interest an investor. The site offers analysis of performance of companies across 20 sectors.
“If you’re a technical investor, you're not going to like Tijori at all,” says Hegde, adding, “because we don't even have one data point for you. But, if you are someone who spends five hours a week going through annual reports, we should probably be the best tool.” They enjoy a loyal following of 16,000 followers on Twitter, an audience that is ripe with suggestions every time they tweet.
With their website right now, one is free to access data on 1,600 NSE companies (out of 1,800) and most of the S&P 500 US companies. Their uncomplicated, simple UI offers in-depth data such as market share, revenue break-up, location exposure, shareholding and financials on companies. But the platform’s pride is its data on a company’s operations. The site allows a user to compare operational metrics.
Say if one wants to invest in a telecom company, and wants to look at Bharti Airtel, apart from its financials, primary statistics that come into play are the number of subscribers and the average revenue per user (ARPU). Through Tijori, the user can easily compare these metrics with other close competitors in the industry.
Marda says, “We pick random unstructured data and spend our time trying to clean that up. One might take 20 minutes to find out about the market share or number of subscribers of all major players in a certain sector, but we make it a 10-second job.” The site also has TJI indexes, which grades companies on sector-specific indices such as TJI Power, TJI Hospitals and TJI Hotels.
The ‘filter’ section of their website allows users to type in and get answers to queries on five alternate data criteria: product, location, market share, raw material and operational metrics. So a user can simply type in, “companies with exposure to China” or “companies that make tyres” and get a simple answer. For financial queries, users can simply build an arithmetic equation using financial fields like balance sheet items, derived ratios. Typing in “5 Yr Avg ROCE > 30” or “Latest quarter pledged holding > 85%” will give a list of companies that satisfy the equation. The site also carries hyperlinks of the source of data.
There are various sites that help investors, but Tijori Finance’s founders say that their service is different in where it places the emphasis. Hegde explains: There are four stages in the lifecycle of an investor. First of discovery, which is usually an uncle or a senior colleague recommending a stock; second is researching into that recommendation, which means weeks of pouring over documents and reading articles; third is making the investment; and fourth is tracking that investment. In the fintech space, most start-ups are focused on the third and the fourth stages, that is, on getting investors to transact on them. Tijori is focused on the first two stages of discovery and research.
Considerable funding and expertise has gone into its making, but the entrepreneurs have not figured out a way to monetise the platform yet. Right now, Tijori is a free-for-all platform with all features available to anyone. They could go with ad-based content or paid content, and the founders are more inclined towards the second. “If the customer doesn't fully value the website, earning money through ads doesn't really bode well,” says Hegde while sharing that if things go as planned, they will go behind a paywall in both India and the US within a few months.
Tijori Finance is also working on building a portfolio tracker. They will track the various companies on a client’s portfolio and, with the granular data on the companies they have, they will be able to alert the user if any event that changes the fate of their investment happens. For example, if the price of a raw material moves up or a certain market has become inaccessible due to a domestic policy.
The start-up’s edge, in its research, can be countered by a large organisation such as Bloomberg or Reuters. They have the money, resources and formidable data gathered over the years. But Tijori Finance’s founders believe that these larger players will attract institutional investors, who can afford their prices, and their start-up could cater to retail investors.
That may sound sensible but it’s easier said than done. First, accuracy of data, and organising unstructured data becomes incrementally expensive, which explains why a data service such as Bloomberg is highly priced. The rest of the data, especially organised data, is highly commoditised. More importantly, it is not inconceivable in today’s digital age to have larger players break down their offerings into freemium versions, with several combinations based on demand and cost considerations.
People who follow the start-up on Twitter for insights, such as Kartikey Sharma, a chartered accountant and a Bhopal-based entrepreneur, says that he is happy with the way they simplify data and how they respond quickly to any suggestions made. Sharma hopes that they will add analyst coverage to their information. Vivek Shah, a SEBI-registered investment planner and founder of a financial advisory firm Finrise, says that he has been following Tijori Finance for nine months now. “The platform is great to use since it provides refined data very quickly.” His only concern with it is accuracy, but the start-up’s founders say that they are rarely off the mark.
If the occasional glitches are fixed, Tijori Finance could have a treasure trove in its hand. But unless they act fast, they stand a very real chance of any of other start-ups replicating the same data in a similarly user-friendly format. There are quite a few other online players offering investment research tools, such as Value Research, MarketMojo and Morningstar. While their tools right now are exactly similar, it might not be difficult to replicate their model.
But the more important challenge for Tijori is to figure out the monetisation model. No treasure remains undiscovered forever.