Social media modified every part from information consumption to purchasing. Now, Dub thinks it may well do the identical for investing via an influencer-driven market the place customers can comply with the trades of high buyers 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 along with his mother and father’ blessing – Dub is betting the way forward for investing isn’t about selecting shares however selecting 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 constructing particular person commerce selections, 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 totally free. On the similar time, social media is reshaping how individuals, and significantly members of Gen Z, make monetary selections.
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 in school” — 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 capacity to “transfer the Dogecoin and Bitcoin markets with each tweet,” and folks’s willingness to “actually comply with concepts and people to a complete new stage,” 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 manner 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 hearth. “Nancy Pelosi is up 123% on Dub with actual capital,” says Wang, “and we’ve made our clients 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 via 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 via 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 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 feel the broader American inhabitants actually believes there are different individuals on the market which have an edge over them on the subject of the investing world,” says Wang.
Combating phrases
The query now’s whether or not Dub will comply with the same 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 completely 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 selections, he says.
He suggests it’s safer for buyers than Robinhood. Says Wang: “I’ve numerous respect for what [CEO] Vlad [Tenev] has performed in making buying and selling free. However on the finish of the day, making it tremendous straightforward to commerce with out knowledgeable steerage, with out training, is absolutely 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 obtainable for purchasers forward of President Donald Trump’s inauguration. Whereas it initially surged in worth, its worth has plummeted since. Says Wang, “I feel basically the incentives are simply misaligned between these huge platforms which can be public firms now that have to earn a living” and that “usually” their clients 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 might develop into of better curiosity to regulators, and that Dub might not but be underneath the “magnifying glass” due to its comparatively smaller measurement.)
Both manner, not everyone seems to be bought on Dub’s imaginative and prescient. The most important knock towards such platforms, says critics, is that inventory selecting 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 numerous these are sponsored by the passive investing index firms,” he says.)
Additional, says Wang, there’s a motive that actively managed hedge funds like Citadel are thriving. “When you have 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 another broadly “appears to be like on the development of the hedge fund area and the asset administration area,” continues Wang, “there’s a motive why it’s rising. It’s as a result of they’re making a living for his or her clients.”
