This startup is bringing the benefits of AI to retail stock market investors

For years, making money in the stock market using artificial intelligence (AI) has largely been an area dominated by the well-funded investment houses. A Mumbai-based startup wants to break that monopoly by bringing AI-driven investing to retail investors.

As financial institutions increasingly look at deep computing power to identify stocks to invest in, InvestorAi believes the benefits of AI can be made available to ordinary retail investors with a clear focus on outcomes rather than just glorifying this technology.

Founded in 2018 by Bruce Keith, Akshaya Bhargava, and Sarthak Behura, InvestorAi has built an AI platform where it selects stocks on behalf of retail investors and offers them access to a level of market intelligence that is out of reach.

The founders, who come with deep experience from the financial services sector, knew that retail investors do not have resources or money to get the level of expertise which is the domain of big investment houses.

Bruce Keith, Founder & CEO, InvestorAi, says, “We decided that we take some of that tech, our experience, and put it in the hands of the investors. The only way we could do that was to use AI.”

However, InvestorAi believes the principles of computing used by large investment houses like hedge funds cannot be applied for the retail investors. Hence, the company chose to focus on just two things — consistency and outcome.

Vertical AI approach

Towards this end, InvestorAi took a vertical approach to AI, building an inhouse, specialised platform focused on the stock markets. The AI system scans vast volumes of data from multiple sources, and looks into all aspects of stock picking — technical, fundamentals, macros, and estimates. Besides, it has built its own engineered features with the AI platform.

A key differentiator for InvestorAi is that its AI platform is completely owned, operated, and managed in-house, unlike many players that rely on third-party tools or off-the-shelf solutions. Stock recommendations are generated through deep, AI-led research rather than rule-based screening.

At the same time, InvestorAi follows an ‘AI plus humans’ model as it believes different strategies and market conditions require different models. This set up and training is supervised and controlled by its Labs team.

“While the AI selects the individual stocks, there is a human review as the strategy is created to pick out outliers and ensure that we are following best practices,” says Keith.

Interestingly, InvestorAi also leverages computer vision technology to identify winning stocks. While computer vision is largely used to identify physical objects, the startup is leveraging this to decipher patterns and spot financial trends.

The results of this AI-led approach are already visible. InvestorAi claims that it has been able generate returns that generally double that of the markets, and its customer renewal rate is about 65%. Keith says, “Anything more than 50% is generally good.”

InvestorAi, which is a SEBI registered company, also allows customers to rebalance their stock portfolio every two weeks.

The platform operates in a crowded ecosystem, competing with brokerage houses, registered investment advisors, and wealth management firms. Its key differentiation lies in its AI-first approach and ability to deliver institutional-grade research to retail investors at accessible price points.

The company did not disclose the exact number of active users or clients.

Product pricing

InvestorAi offers products in three main categories— equity basket consisting of 10-15 stocks, intra-day basket with 3-4 stocks, and margin trade finance of four stocks.

The pricing of its services varies on the kind of products it offers. The intra-day basket is priced at Rs 50 while for the equity segment ranges from Rs 3,500 to Rs 30,000 per annum.

InvestorAi reaches out to its customers through other market intermediaries under a B2B2C model. Keith says, “It made much more sense to us to align ourselves with partners who already had access to the right customer base. This has allowed us to grow rapidly without huge spending on brand awareness or customer acquisition.”

The startup also pivoted since its founding. Previously, it was focused on the wealth management segment in the UK, Europe, and the US. But after the Covid-19 pandemic, it repositioned itself towards the retail segment by launching its first product in 2021.

“We picked India because the opportunity to scale here and create a really proper big business in our vertical is absolutely possible,” Keith says.

InvestorAi has raised Rs 160 crore in funding till now from Ashish Kacholia, founder, Lucky Investment Managers and his associates. The startup has also built in features with its AI platform to ensure that their customers do not lose money especially in intra-day or margin trade finance segment of stock trading.

As part of its future plans, InvestorAi plans to come out with newer kinds of products specifically targeted at younger investors.

“The USP of our business is consistency of outcomes and we get that through AI through a very disciplined approach,” says Keith.