Social media modified every part from information consumption to buying. Now, Dub thinks it will probably do the identical for investing by means of an influencer-driven market the place customers can observe the trades of high buyers with a number of faucets. Consider it as TikTok meets Wall Road.
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 selecting individuals. 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 selections, Dub customers can copy total 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 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 free of charge. On the identical time, social media is reshaping how individuals, and notably members of Gen Z, make monetary selections.
As a Harvard scholar throughout 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 potential to “transfer the Dogecoin and Bitcoin markets with each tweet,” and other people’s willingness to “actually observe concepts and people to a complete 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 method 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 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 in the present day by means 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 partially by means of natural development. “Creators who’re good merchants on the app are incentivized to convey 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 advertisements particularly to amass customers, together with on Instagram. “We’ve been actually fortunate the place I believe the broader American inhabitants actually believes there are different individuals on the market which have an edge over them in terms of the investing world,” says Wang.
Preventing phrases
The query now’s whether or not Dub will observe an analogous path as different fast-growing fintech startups, a lot 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 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.)
An enormous 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 buyers make knowledgeable selections, he says.
He suggests it’s safer for buyers than Robinhood. Says Wang: “I’ve a variety of respect for what [CEO] Vlad [Tenev] has finished in making buying and selling free. However on the finish of the day, making it tremendous straightforward to commerce with out skilled steerage, with out schooling, 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 accessible for patrons forward of President Donald Trump’s inauguration. Whereas it initially surged in worth, its worth has plummeted since. Says Wang, “I believe basically the incentives are simply misaligned between these massive platforms which can be public corporations now that must become profitable” and that “typically” their clients have “in all probability misplaced cash.”
(Price noting: in a separate, latest dialog with Robinhood’s Tenev about Dub, Tenev proposed to TechCrunch that duplicate buying and selling may develop into of larger curiosity to regulators, and that Dub might not but be underneath the “magnifying glass” due to its comparatively smaller measurement.)
Both method, not everyone seems to be bought on Dub’s imaginative and prescient. The largest knock towards such platforms, says critics, is that inventory selecting 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 a variety of these are sponsored by the passive investing index corporations,” he says.)
Additional, says Wang, there’s a purpose that actively managed hedge funds like Citadel are thriving. “If you happen to 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 “seems on the development of the hedge fund house and the asset administration house,” continues Wang, “there’s a purpose why it’s rising. It’s as a result of they’re creating wealth for his or her clients.”
