FX trader’s Fintech startup gets serious cash from major investors
Aritra Chakravarty quit his position at HSBC as Global Head of Digital FX and is now looking to change the whole retail sector, with willing investors behind him
If anyone needs any encouragement that the way forward for the electronic trading industry is to branch out into technologically advanced self-directed new products and platforms, then British FX trader Aritra Chakravatry’s experience can certainly be used as a yardstick.
Mr Chakravarty, who comes from HSBC, where he was Global head of Digital FX and investment products, he decided to go the modern route and combine his expertise with London’s incredibly empowering new age financial technology environment to create a challenger bank, majoring on high end fully digital solutions.
It may have been a year in the making, as Mr Chakravarty embarked on establishing his new firm in June last year, however yesterday evening he closed a major deal with crowdfunded investors to develop new products, and grow the business.
Whilst it is very difficult to get investors to look closely at retail FX and brokerage businesses, all-encompassing challengers and new platforms are very ripe for investment, with Mr Chakravarty’s deal totalling £3.8m via crowdfunding resource Seedrs.
The new company, which is called “Dozens”, had initially set a target of £3.5m, but exceeded that amount with more than 2,150 investors in 42 countries.
The funding will be used to power further growth initiatives, new product development, such as business banking and child accounts, and the first phase of its banking license application.
Dozens is currently authorised by the Financial Conduct Authority on an e-money licence and a MiFID investment license, allowing the platform to offer proprietary financial products, with Mr Chakravarty saying yesterday “Dozens was born out of a need to align business incentives with the customer’s financial well being, and as a result our community has been at the heart of our operations and development since inception. We are delighted by the number of investors who have shown an interest in joining this community, and look forward to working with them closely in order to make Dozens the business we are confident it can be.”
During the first part of the development of the firm, the new company was known as Project Imagine, and was intended to go into direct competition with fully digital banks such as Starling, Monzo or Atom.
These have managed to have an impact in the industry, but until the end of last year had struggled to maintain a momentum, so their market share at the time having been considered by many not big enough to present a threat to traditional high street banks. Things are somewhat different a year on.
In June last year, Mr Chakravarty elaborated on the direction he wanted to take, saying “We want to be a mix of Monzo, Nutmeg and Moneybox, all in one, which means a digital current account, savings and investment all in one, with heavy focus on personal finance management. We want to encourage savings and money management, and help people get out of the overdraft/over-spending loop – hence we will offer 3.14% in deposits from the start.”
Clearly, new firms that empower direct retail customers have become vastly popular in the UK and North America since then, notable examples being Revolut (which in my opinion is brilliant – Ed), and Dabbl, which was founded by Mark Ackred, whose career includes senior executive positions at CMC Markets, Think IS and City Index.
It would be a great thing to see more FX industry giants take this route into new products and lead the way in the digital banking arena. You can easily beat the banks at their own core business!