Social media modified every little thing from information consumption to buying. Now, Dub thinks it will probably do the identical for investing by an influencer-driven market the place customers can comply with the trades of prime traders 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 dad and mom’ 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 selections, Dub customers can copy complete 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 have been blown aside roughly a decade in the past by mobile-first platforms like Robinhood that invited individuals to commerce without cost. On the similar time, social media is reshaping how individuals, and notably members of Gen Z, make monetary selections.
As a Harvard scholar 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, have been on a collision course. Between the GameStop saga, Elon Musk’s skill to “transfer the Dogecoin and Bitcoin markets with each tweet,” and other people’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 fair 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 concept has caught fireplace. “Nancy Pelosi is up 123% on Dub with actual capital,” says Wang, “and we’ve made our prospects 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 a $10-per-month subscription mannequin. Wang says additional that some “prime” portfolios on the platform cost administration charges and Dub takes a 25% lower of these charges.
Within the meantime, Dub has scaled partially by natural development. “Creators who’re good merchants on the app are incentivized to carry their viewers,” says Wang, whose dad and mom immigrated from China and who grew up in Detroit.
Dub can be investing aggressively in promoting, leaning closely into Meta adverts specifically to amass 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 relating to the investing world,” says Wang.
Preventing phrases
The query now’s 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, however it additionally confronted regulatory scrutiny forward of its 2021 IPO, finally 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 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 danger scores, risk-adjusted returns, and portfolio stability metrics to assist traders make knowledgeable selections, he says.
He suggests it’s safer for traders than Robinhood. Says Wang: “I’ve lots 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 straightforward to commerce with out skilled steering, with out training, is admittedly 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 value, its value has plummeted since. Says Wang, “I feel essentially the incentives are simply misaligned between these huge platforms which might be public corporations now that must make cash” and that “usually” their prospects have “in all probability misplaced cash.”
(Value noting: in a separate, current dialog with Robinhood’s Tenev about Dub, Tenev proposed to TechCrunch that replicate buying and selling might develop into of larger curiosity to regulators, and that Dub could 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 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 lots 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. “In case you have 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 “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 getting cash for his or her prospects.”
