Social media modified all the things from information consumption to purchasing. Now, Dub thinks it could actually do the identical for investing by way of an influencer-driven market the place customers can comply with the trades of high buyers with a couple 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 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 advanced dramatically over the previous twenty 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 spending a dime. On the identical time, social media is reshaping how individuals, and notably members of Gen Z, make monetary choices.
As a Harvard pupil 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 imagine these two traits, retail investing and influencer-driven decision-making, had been on a collision course. Between the GameStop saga, Elon Musk’s means 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 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 manner 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 adverts 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 in the present day 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% minimize of these charges.
Within the meantime, Dub has scaled partially by way of natural development. “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 be investing aggressively in promoting, leaning closely into Meta adverts particularly to accumulate customers, together with on Instagram. “We’ve been actually fortunate the place I feel the broader American inhabitants actually believes there are different individuals on the market which have an edge over them in relation to the investing world,” says Wang.
Preventing phrases
The query now could be whether or not Dub will comply with an analogous 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, but it surely additionally confronted regulatory scrutiny forward of its 2021 IPO, in the end 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 laws. “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 teach customers, not simply encourage blind hypothesis. The platform shows threat scores, risk-adjusted returns, and portfolio stability metrics to assist buyers make knowledgeable choices, he says.
He suggests it’s safer for buyers than Robinhood. Says Wang: “I’ve loads of respect for what [CEO] Vlad [Tenev] has completed 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 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 out there for patrons forward of President Donald Trump’s inauguration. Whereas it initially surged in worth, its worth has plummeted since. Says Wang, “I feel essentially the incentives are simply misaligned between these large platforms which are public corporations now that must earn money” 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 Fintech that duplicate buying and selling may grow to be of larger curiosity to regulators, and that Dub might not but be beneath the “magnifying glass” due to its comparatively smaller dimension.)
Both manner, 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 choosing underperforms passive investing over the long term, with research displaying that the majority 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 wager loads of these are sponsored by the passive investing index corporations,” 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 constantly placing up non-correlated returns 12 months after 12 months after 12 months,” he says.
If yet one more broadly “appears 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 creating wealth for his or her clients.”
