Social media modified every little thing from information consumption to buying. Now, Dub thinks it will possibly do the identical for investing by way of an influencer-driven market the place customers can observe the trades of high traders with a number of faucets. Consider it as TikTok meets Wall Avenue.
Based by 23-year-old Steven Wang — a Harvard drop-out who started investing in second grade together with his mother and father’ blessing – Dub is betting the way forward for investing isn’t about selecting shares however as a substitute selecting folks. The app permits customers to observe the methods of merchants, hedge funds, and even these mimicking high-profile politicians. As a substitute of creating particular person commerce choices, Dub customers can copy complete 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 have been blown aside roughly a decade in the past by mobile-first platforms like Robinhood that invited folks to commerce at no cost. On the identical time, social media is reshaping how folks, and notably members of Gen Z, make monetary choices.
As a Harvard scholar through the pandemic — one who was buying and selling from his dorm room “since you couldn’t actually do something in school” — Wang got here to imagine these two tendencies, retail investing and influencer-driven decision-making, have been on a collision course. Between the Gamestop saga, Elon Musk’s skill to “transfer the Dogecoin and Bitcoin markets with each tweet,” and folks’s willingness to “actually observe 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 person is between 30 and 35, says Wang, although New York-based Dub is clearly discovering its means in entrance of a fair 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 hearth. “Nancy Pelosi is up 123% on Dub with actual capital,” says Wang, “and we’ve made our prospects tens of millions 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 immediately 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% reduce of these charges.
Within the meantime, Dub has scaled partly by way of natural progress. “Creators who’re good merchants on the app are incentivized to convey their viewers,” says Wang. Dub can also be investing aggressively in promoting, leaning closely into Meta advertisements particularly 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 folks on the market which have an edge over them in the case of the investing world,” says Wang.
Combating phrases
The query now could be whether or not Dub will observe an identical path as different fast-growing fintech startups, lots 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 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 laws. “We didn’t simply navigate regulation at Dub — we embraced it,” Wang says. (Like Robinhood, Dub is a totally licensed broker-dealer.)
A giant 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 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 simple to commerce with out knowledgeable steering, 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 patrons forward of President Donald Trump’s inauguration. Whereas it initially surged in value, its value has plummeted since. Says Wang, “I believe basically the incentives are simply misaligned between these huge platforms which are public firms now that must make cash” and that “usually” their prospects have “most likely misplaced cash.”
(Value noting: in a separate, latest dialog with Robinhood’s Tenev about Dub, Tenev proposed to TechCrunch that replicate buying and selling may develop into of higher curiosity to regulators, and that Dub could not but be underneath the “magnifying glass” due to its comparatively smaller measurement.)
Both means, not everyone seems to be offered on Dub’s imaginative and prescient. The most important knock in opposition to such platforms, says critics, is that inventory selecting 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. “In case you 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 yr after yr after yr,” he says.
If yet one more broadly “seems on the progress 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 earning money for his or her prospects.”