Rain or shine, there's no stopping StashAway

Singapore

EVEN as global markets rumble, robo-advisor StashAway can count on its base of "habitual savers" with nerves of steel to ride the volatility.

This is the view of the startup's backer Eight Roads Ventures. In July, the global proprietary investment firm led a US$12 million Series B round in StashAway.

Eight Roads, which is in turn solely backed by financial services giant Fidelity, invests in verticals including consumer tech, fintech and healthcare. It set up its first South-east Asian office in Singapore last year and has been stepping up its investments in the region.

Founded in 2016, StashAway runs a digital wealth management platform that offers automated and personalised portfolio management to each individual portfolio of its clients. It takes into account individual investors' preferences, such as their risk appetites.

Operating in Singapore and Malaysia, the platform has also come up with products that seem in vogue with its base of over 100,000 users. In September, for instance, it launched a Singapore-focused income portfolio comprising local ETFs, in response to customer demand.

Prakhar Singh, vice-president at Eight Roads, speaking on behalf of the team, tells The Business Times more about why Eight Roads is bullish on StashAway.

What drew Eight Roads to invest in StashAway?

StashAway is the clear market leader by far in Singapore and Malaysia across multiple aspects; it was the first online platform to receive a full capital markets services licence for fund management in Singapore and Malaysia and currently serves over 100,000 users.

(It has) a great product with amazing customer feedback and retention: Its well-designed app is rated highly and supported by a responsive customer support team. StashAway has built a strong brand resulting in very high customer retention - every customer almost triples account balance in 12 months.

Contrary to the belief that robo-advisors are only for millennials, 20 per cent of StashAway's AUM (assets under management) comes from accredited investors. The largest industries represented are those working in the financial services followed by technology, government and consulting.

The founding team consists of former C-level executives of leading consumer Internet businesses in South-east Asia and Europe, as well as a seasoned chief investment officer with close to 20 years of institutional multi-asset investment experience.

What broad trends in millennial investing habits are favourable to StashAway?

StashAway's customers are typically young working professionals, 25-45 years old. This segment is digitally savvy, traditionally underserved by banks and financial advisers and doesn't necessarily require a physical support system.

Investment-linked insurance, unit trusts and structured notes are the typical investment options the incumbent players sell to this segment. These expensive products are usually sold without any holistic assessment of financial needs and are not the ideal investment products for these customers.

In the absence of better alternatives, many people tend to leave a significant proportion of their assets in saving accounts with low yields.

Amid current volatility, how can StashAway stay relevant?

It is impossible to time the market. StashAway focuses on its investment framework that ensures that the risk profile of its portfolios matches the investment goals set by its customers.

Therefore, as an investor it is important that you invest on a regular basis instead of trying to time the market. StashAway also invests a lot in educating its customers about this philosophy through seminars and constant communication.

Luckily a large percentage of StashAway's customers are habitual savers saving for the long-term.

How is StashAway different from its industry peers?

StashAway has invested significantly more in developing state-of-the-art technology and a very sophisticated investment framework.

One way to achieve a seamless user experience is to offer a Web-based application and a mobile application. Some incumbents only offer their robo-products to retail clients as it may cannibalise their premium or private bank offering where there are higher margins.

StashAway offers the same intelligent product to both retail and accredited investors at the same low cost.

Do you think there is potential for StashAway to expand beyond wealth management?

For the foreseeable future, StashAway will continue to focus on wealth management. Wealth management is a huge space and expansion for StashAway means iterating and introducing newer products.

For example, they recently launched income portfolios that help generate a regular source of income for those focused on a passive income strategy. There are a few other products in the hopper and in the meantime, they will expand beyond Singapore and Malaysia and will soon be in a few more countries.

Eight Roads at a glance