Reinventing Investment Research – Raghav Kapoor

As the CEO and Co-founder of Smartkarma, Asia’s leading marketplace for Investment Research and Data Analytics, Raghav Kapoor firmly believes in the power of technology to solve complex problems, and his team built Smartkarma from the ground up to empower research consumers and analysts to achieve their full potential in an unbundled world.

 

Tell me a little bit about yourself.

 

Over my career, I have had worked in various positions of leadership across major financial institutions and also as an entrepreneur. Prior to co-founding Smartkarma, I was a Managing Director at Religare Capital Markets from 2010 to 2014. I joined Religare upon the successful exit of Aviate Global (Asia), where I was a Founding Partner.

 

From 2006 to 2009, I was Vice President of Regional Equities Sales at Citigroup, where I grew and managed several large relationships.

 

I graduated with a First Class Honours in Computer Science from Cambridge University, and a Masters in Management Science & Engineering from Stanford University.

 

What is your business venture about?

 

Smartkarma ignores age old conflicted business models. Smartkarma isn’t a solution to
the latest problem. Smartkarma is an entirely new Industry. Built from the ground up to
empower research consumers and analysts to achieve their full potential in an unbundled world.

 

Smartkarma’s interactive platform brings together a large and growing body of Globally
based Independent Research firms, boutiques and analysts. A rigorous selection criteria
ensures only providers capable of the highest quality work, that brings differentiation and
value to the community, can join.

 

A culture of compliance permeates everything. Strict compliance protocols, frameworks
and tools are embedded throughout, providing trust, transparency, safety and security.

 

MiFiDII compliance comes naturally without the need for complex, subjective and
unreliable techniques requiring expensive and repetitive manual input. Smartkarma’s
algorithms do all the heavy lifting.

 

Smartkarma offers independent providers integrated support across their businesses,
from marketing, to compliance and reporting., Ending unnecessary replication means
unprecedented value for money for all consumers, no matter what their size.

 

Smartkarma serves a large and rapidly growing base of traditional and non-traditional
institutional subscribers including some of the world’s largest asset managers. A single
per-user subscription provides simple, interactive and highly personalized access to
everything. Smartkarma has become part of our subscribers daily workflow.

 

What is your mission at the outset?

 

Smartkarma was started with a vision to bring simplicity, efficiency and transparency to
the investing world. At the core, Smartkarma is trying to match good people with great
ideas fostering the sharing and efficient dissemination of high-quality investment insights.

 

The investment research industry is broken. It doesn’t meet the needs of regulators,
consumers or analysts. Propped up by conflicted and vested interests, it has suffered
from a lack of investment, is grossly inefficient, and as a whole, downright frustrating.

 

Rather than trying to provide sticking plaster solutions; tools to hide the mess, what if
you could do it all over again?

 

That is Smartkarma.

 

How did you get your idea or concept for the business?

 

Smartkarma was started by industry veterans who could see a large industry in desperate need of profound change.

Suffering from bloated cost structures, inefficient distribution models and an abject lack of transparency, we wanted to create a business that could effectively turn the industry inside-out, creating unparalled efficiencies.

 

Smartkarma stands for new distribution for the rapidly fragmenting world of Investment Research.

 

What is unique about your business?

 

Smartkarma has proposed a whole new business model for the production, distribution,
consumption and monetization of investment research services.

 

Our model allows Investors to pay a single subscription to access research & complementary services from a vast and growing pool of Insight Providers that previously suffered from a lack of distribution.

 

Through our platform, Smartkarma’s Insight Providers can obtain an integrated suite of services that helps them build and grow their research businesses.

 

Who do you sell to and how do you get customers?

 

Smartkarma’s clientbase comprises of global asset managers. This include sovereign wealth funds, endowments, global hedge funds as well as family offices. Being a two-sided marketplaces, we have large positive network effects that help us grow the business organically.

 

In addition, we partner with global financial institutions who see merit in bringing the Smartkarma platform to their customers.

 

An example is Societe Generale who signed a global distribution agreement with Smartkarma in December 2016 to distribute our platform to their global institutional client base.

 

We firmly believe in winning by creating win-wins

 

Why will customers stay or do repeat business with you?

 

Smartkarma’s moat is driven by its strong network effects and compelling economics. We provide a unique solution to evolving regulatory requirements (MIFID II) for our compliments, and help them optimize their research spend and efficiently allocate research dollars.

 

By solving the unique and evolving needs of our clientbase, and continuing to grow our supply base we create large-scale positive network externalities.

 

What have been the biggest obstacles?

 

In proposing a new business model, we have had to invest time and energy in educating our clients of a “new way” of doing business. This was a crucial first step to building our business.

 

Building a moat around compliance, and investing heavily in enterprise-grade compliance-tech has been a key challenge for us, and is perhaps a key driver of our economic moat going forward.

 

Finally, being headquartered in Singapore we have also found it hard to recruit tech talent
easily.

 

If you had one piece of advice to someone just starting out, what would it be?

 

I would advise them to remain convicted, and single-minded. Trying to do too many things is a sure way to end up nowhere.

 

Who is your biggest inspiration or drive to do what you are doing?

 

Our motivation lies in our unfettered belief that we have a once-in-a-lifetime chance to reinvent a multibillion dollar industry that’s fundamental to how capital markets operate. We believe we can be a powerful agent of positive change, that impacts the lives of research providers and asset managers alike

 

What’s next for you and for SmartKarma?

 

In under two years, Smartkarma has etched its mark as Asia’s leading, preeminent platform for Investment Research. This is just the start. We hope to continue to expand the scope of our offering (geographically), and build services for immediate adjacencies (e.g. private wealth, corporates).

 

Closer to home, I am looking forward to our second child, due just in time for Singapore’s
birthday

Chia Hock Lai

Chia Hock Lai

Chia Hock Lai is passionate about how technology is disrupting the way financial services are being delivered to consumers and businesses, and in the process making the financial system more efficient and inclusive.

Hock Lai has 18 years of experience in the financial industry, having performed roles in both business and technology. He graduated from the National University of Singapore (Real Estate), Nanyang Technological University (Infocomm Technology) and Nanyang Polytechnic (Fund Management & Administration).

He is also a Fellow of the Singapore University of Social Science, advisor to FinTech Startups and mentor to student FinTech projects.
Chia Hock Lai

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