Personal investment platform Upside AI raises $1.2 million in seed funding to help Indians make money

• Upside has raised its seed round from Endiya Partners, Vijay Kedia and others
  
  
• It relies on artificial intelligence algorithms to help its customers create stock portfolios
  
  
• The company claims to have a increased its asset under management by 10 times in the last one year

Indian investment management platform Upside has raised $1.2 million in a seed funding round led by early-stage investor Endiya Partners. Veteran stock market investor Vijay Kedia, Quantum Advisors’ Ajay Nanavati and Myelin Foundry’s Gopichand Katragadda also participated in this round.

Founded in 2017 by Kanika Agarrwal, Nikhil Hooda, and Atanuu Agarrwal, Upside is a portfolio management service (PMS) that relies on artificial intelligence and machine learning (AI/ML) algorithms to invest in the Indian stock markets. The company was in beta mode for over a year and was officially launched in July 2019.

The company claims to have delivered about 71% cumulative returns to the investors registered on the platform since its official launch. It further claims that its assets under management (AUM) has grown over 10 times in the last one year to over ₹55 crore with funds from several high networth individuals (HNI) and family offices.

Now, Upside aims to add over 1,000 HNIs, family offices and institutional investors to its list, and grow its AUM to ₹1,000 crore.

“We believe the Indian asset management industry is in its early days with single digit penetration of household wealth. Technology and rules-based investing already dominates mature markets; in fact, the top 5 hedge funds in the world are quantitative funds [which use quantitative analysis, instead of human judgement]. 5-10 years from now this will play out in India too and we are excited to be at the forefront of this movement,” the company’s cofounder Atanuu Agarrwal said.


How does Upside work?

Upside was built on the belief that technology will make better investing decisions than humans in the long term as machines are unbiased, unemotional and unaffected by the market euphoria. The company has developed AI and ML algorithms that run over 50 million iterations to generate a portfolio of 15-20 stocks for its customers.

It automatically diversifies the customer’s portfolio and lowers the risk. As per Upside’s website, it does not invest more than 10% of the customer’s capital in any one stock or more than 35% in any one industry. It also optimises and rebalances portfolio every quarter as companies publish their financial results.


The company also pushes for human interventions and allows AI analysts to do manual checks on corporate governance in order to ensure that the listed companies are reporting their financials accurately.


Indians get a taste of personal finance

Fintech turned out to be the most funded segment of 2020, as people switched to digital modes of transaction to minimise the exposure to Covid-19 virus. As per an Inc42 Plus report, fintech startups raised over $2.1 billion in 2020. Interestingly, Indian fintech startups already crossed this figure in the first five months of 2021 and is expected to close the year with its highest funding to date.


Not only investors, but customers too have been particularly attracted towards digitised personal finance solutions. According to an AppsFlyer report, Indians downloaded the most number of finance apps between October 2020 to March 2021. The top three mega markets -- India, Brazil and Indonesia -- made up almost half of the global number of downloads.


Overall, fintech apps were downloaded about 2.7 billion times in the Asia-Pacific (APAC) region between the first quarter (January-March) of 2019 and the first quarter of 2021.