Social media modified every part from information consumption to buying. Now, Dub thinks it will possibly do the identical for investing via an influencer-driven market the place customers can observe the trades of prime 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 along 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 observe the methods of merchants, hedge funds, and even these mimicking high-profile politicians. As an alternative of creating particular person commerce choices, 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 advanced 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 without cost. On the identical time, social media is reshaping how individuals, and notably members of Gen Z, make monetary choices.
As a Harvard pupil throughout the pandemic — one who was buying and selling from his dorm room “because you couldn’t really do anything at school” — Wang got here to consider these two developments, retail investing and influencer-driven decision-making, had been on a collision course. Between the Gamestop saga, Elon Musk’s means to “move the Dogecoin and Bitcoin markets with every tweet,” and folks’s willingness to “really follow ideas and individuals to a whole new level,” 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 an excellent 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 fireplace. “Nancy Pelosi is up 123% on Dub with real capital,” says Wang, “and we’ve made our customers 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 at present via a $10-per-month subscription mannequin. Wang says additional that some “top” portfolios on the platform cost administration charges and Dub takes a 25% minimize of these charges.
Within the meantime, Dub has scaled partly via natural development. “Creators who are good traders on the app are incentivized to bring their audience,” 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 advertisements particularly to amass customers, together with on Instagram. “We’ve been really lucky where I think the broader American population really believes there are other people out there that have an edge over them when it comes to the investing world,” says Wang.
Preventing phrases
The query now’s whether or not Dub will observe an identical 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, however 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, guaranteeing its mannequin complied with monetary laws. “We didn’t just 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 teach customers, not simply encourage blind hypothesis. The platform shows threat scores, risk-adjusted returns, and portfolio stability metrics to assist buyers make knowledgeable choices, he says.
He suggests it’s safer for buyers than Robinhood. Says Wang: “I have a lot of respect for what [CEO] Vlad [Tenev] has done in making trading free. But at the end of the day, making it super easy to trade without expert guidance, without education, is really just gambling for the broader population.”
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 purchasers forward of President Donald Trump’s inauguration. Whereas it initially surged in worth, its worth has plummeted since. Says Wang, “I think fundamentally the incentives are just misaligned between these big platforms that are public companies now that need to make money” and that “generally” their clients have “probably lost money.”
(Value noting: in a separate, latest dialog with Robinhood’s Tenev about Dub, Tenev proposed to TechCrunch that replicate 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 dimension.)
Both manner, not everyone seems to be offered on Dub’s imaginative and prescient. The most important knock in opposition to such platforms, says critics, is that inventory choosing underperforms passive investing over the long term, with research exhibiting 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 bet a lot of those are sponsored by the passive investing index companies,” he says.)
Additional, says Wang, there’s a motive that actively managed hedge funds like Citadel are thriving. “If you look at what the ultra wealthy can do, they’re giving their money to Ken Griffin of Citadel, [because] they’re consistently putting up non-correlated returns year after year after year,” he says.
If yet one more broadly “looks at the growth of the hedge fund space and the asset management space,” continues Wang, “there’s a reason why it’s growing. It’s because they are making money for their customers.”
