Trackk, a wealthtech platform focused on Gen Z, is making a significant shift by entering the broking space. This move allows the startup to offer equity and futures and options (F&O) trading, transitioning from its previous role as a sub-broker.
According to co-founder and CEO Vedant Gupte, the change is driven by the need for greater control over product offerings, technology, and design. Previously, Trackk operated on Angel One's backend, creating approximately 30,000 demat accounts during that time. Now, with its own risk and order management system, Trackk aims to enhance its services for young investors.
Targeting Young Investors
Founded in 2021, Trackk initially focused on stock discovery and social investing, primarily catering to first-time investors. The platform now seeks to convert its existing user base into active traders, starting with stocks and F&O, and plans to introduce additional financial products like mutual funds in the future.
Currently, around 90% of Trackk's users are from the Gen Z demographic, with an average age of 20-24 years. The company aims to reach 500,000 accounts within the next year, with a significant portion of new users being first-time demat account holders.
Market Context
This expansion comes amid a competitive landscape for wealthtech and broking startups, as venture capital continues to flow into the sector despite challenges such as reduced active trading clients and stricter regulations on derivatives trading. Trackk recently secured $3.7 million in seed funding, led by Lightspeed Ventures and other notable investors.
Strategic Positioning
Trackk aims to differentiate itself from established brokers, which typically cater to older demographics, and from newer platforms that focus heavily on active trading. Gupte emphasizes that the primary concern for new investors is not just account setup but understanding what to buy and how to begin their investment journey.
Challenges Ahead
As Trackk ventures into broking, it faces the challenge of building trust and compliance in a market where product depth is as crucial as distribution. The introduction of F&O trading occurs at a time when regulatory scrutiny is increasing, particularly following reports that a significant percentage of individual traders have incurred losses in this area.
Overall, Trackk's transition into broking represents a strategic move to better serve the needs of Gen Z investors while navigating a complex and evolving financial landscape.
