Social media modified the whole lot from information consumption to buying. Now, Dub thinks it might do the identical for investing by way of an influencer-driven market the place customers can observe the trades of prime buyers with just a few 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 dad and mom’ 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 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 advanced dramatically over the previous 20 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 similar time, social media is reshaping how individuals, and significantly members of Gen Z, make monetary selections.

As a Harvard scholar through 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 developments, retail investing and influencer-driven decision-making, had been on a collision course. Between the GameStop saga, Elon Musk’s means to “transfer the Dogecoin and Bitcoin markets with each tweet,” and other people’s willingness to “actually observe 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 consumer is between 30 and 35, says Wang, although New York-based Dub is clearly discovering its approach in entrance of a good 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 thought has caught fireplace. “Nancy Pelosi is up 123% on Dub with actual capital,” says Wang, “and we’ve made our clients hundreds of 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 immediately by way of a $10-per-month subscription mannequin. Wang says additional that some “prime” portfolios on the platform cost administration charges and Dub takes a 25% minimize of these charges.

Within the meantime, Dub has scaled partly by way of 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 also be investing aggressively in promoting, leaning closely into Meta adverts particularly 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 in terms of the investing world,” says Wang.

Combating phrases

The query now could be whether or not Dub will observe an identical 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, nevertheless 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 buyers make knowledgeable selections, he says.

He suggests it’s safer for buyers than Robinhood. Says Wang: “I’ve numerous respect for what [CEO] Vlad [Tenev] has achieved in making buying and selling free. However on the finish of the day, making it tremendous simple to commerce with out skilled steerage, with out schooling, is basically 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 obtainable for purchasers forward of President Donald Trump’s inauguration. Whereas it initially surged in worth, its worth has plummeted since. Says Wang, “I feel essentially the incentives are simply misaligned between these massive platforms which can be public firms now that must generate income” and that “typically” their clients have “most likely misplaced cash.” 

(Price noting: in a separate, recent conversation with Robinhood’s Tenev about Dub, Tenev proposed to TechCrunch that duplicate buying and selling may turn out to be of better curiosity to regulators, and that Dub might not but be underneath the “magnifying glass” due to its comparatively smaller dimension.)

Both approach, not everyone seems to be bought on Dub’s imaginative and prescient. The most important knock towards such platforms, says critics, is that inventory selecting 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 wager numerous these are sponsored by the passive investing index firms,” 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 yr after yr after yr,” he says.

If yet one more broadly “seems on the development of the hedge fund area and the asset administration area,” continues Wang, “there’s a purpose why it’s rising. It’s as a result of they’re making a living for his or her clients.”