Social media modified every thing from information consumption to procuring. Now, Dub thinks it may well do the identical for investing by way of an influencer-driven market the place customers can comply with the trades of high traders with just a few 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 along with his mother and father’ blessing – Dub is betting the way forward for investing isn’t about choosing shares however choosing individuals. The app permits customers to comply with the methods of merchants, hedge funds, and even these mimicking high-profile politicians. As an alternative of creating particular person commerce choices, 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 20 years. The times of $7 buying and selling commissions and clunky brokerage interfaces had been blown aside roughly a decade in the past by mobile-first platforms like Robinhood that invited individuals to commerce without cost. On the similar time, social media is reshaping how individuals, and significantly members of Gen Z, make monetary choices.
As a Harvard pupil through 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, had been on a collision course. Between the GameStop saga, Elon Musk’s potential to “transfer the Dogecoin and Bitcoin markets with each tweet,” and folks’s willingness to “actually comply with concepts and people to an entire new degree,” Wang determined to drop out in 2021 and begin constructing Dub.
Proper now, the platform’s common consumer is between 30 and 35, says Wang, although New York-based Dub is clearly discovering its means in entrance of a good youthful viewers. In latest 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 prospects 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 this moment by way of a $10-per-month subscription mannequin. Wang says additional that some “high” portfolios on the platform cost administration charges and Dub takes a 25% lower of these charges.
Within the meantime, Dub has scaled partially by way of natural progress. “Creators who’re good merchants on the app are incentivized to carry their viewers,” says Wang, whose mother and father immigrated from China and who grew up in Detroit.
Dub can also be investing aggressively in promoting, leaning closely into Meta advertisements specifically to accumulate customers, together with on Instagram. “We’ve been actually fortunate the place I believe the broader American inhabitants actually believes there are different individuals on the market which have an edge over them with regards to the investing world,” says Wang.
Preventing phrases
The query now could be whether or not Dub will comply with the same 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, nevertheless it additionally confronted regulatory scrutiny forward of its 2021 IPO, finally ditching a characteristic 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 totally licensed broker-dealer.)
An enormous distinction, argues Wang, is that Dub is designed to coach customers, not simply encourage blind hypothesis. The platform shows threat scores, risk-adjusted returns, and portfolio stability metrics to assist traders make knowledgeable choices, he says.
He suggests it’s safer for traders than Robinhood. Says Wang: “I’ve quite a lot of respect for what [CEO] Vlad [Tenev] has accomplished in making buying and selling free. However on the finish of the day, making it tremendous straightforward to commerce with out skilled steerage, with out training, is actually 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 out there 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 huge platforms which are public corporations now that must generate profits” and that “typically” their prospects have “most likely misplaced cash.”
(Value noting: in a separate, recent conversation with Robinhood’s Tenev about Dub, Tenev proposed to TechCrunch that replicate buying and selling might grow to be of better curiosity to regulators, and that Dub might not but be below the “magnifying glass” due to its comparatively smaller dimension.)
Both means, not everyone seems to be offered on Dub’s imaginative and prescient. The largest knock in opposition to such platforms, says critics, is that inventory choosing underperforms passive investing over the long term, with research displaying 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 quite a lot of these are sponsored by the passive investing index corporations,” he says.)
Additional, says Wang, there’s a purpose that actively managed hedge funds like Citadel are thriving. “If you happen to have a look at what the extremely rich can do, they’re giving their cash to Ken Griffin of Citadel, [because] they’re constantly placing up non-correlated returns 12 months after 12 months after 12 months,” he says.
If another broadly “seems to be on the progress of the hedge fund area and the asset administration area,” continues Wang, “there’s a purpose why it’s rising. It’s as a result of they’re earning money for his or her prospects.”
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