Mutual Fund penetration in India is only 2-3%, compared to 30-40% in developed economies. Favorable demographics in the form of a large working population in the under-30 age bracket should help improve MF penetration in India. In the US, MF penetration improved from 5% to 40% over two decades as the baby boomer population took over.
Scripbox currently has AUM of ~Rs1 bn, and is adding ~ Rs 100 mn of AUM per month. The business model is commission based, though Scripbox earns lesser commission than a distributor, as it isn?t really a push-seller, but a pull-seller. Its proprietary algorithm selects a set of funds tailor made for an individual client, and does not require any knowledge of financial markets from the client. This portfolio is reviewed periodically and changes are made accordingly. Important criteria for fund selection include: (1) size of the fund (absolute size of debt fund, relative size of Scripbox?s holding in an equity fund), (2) past performance.
Scripbox is different from other portals in that it facilitates advice-based investment, as opposed to others who merely facilitate transactions. The biggest costs currently are customer acquisition costs. Scripbox?s customer base is largely Bangalore-centric, and the company uses online means such as Facebook and LinkedIn to promote its content. Scripbox is currently drawing ~0.6 mn users to its portal per month. The median age of the company?s customers has declined from 37 to 33 years, and is expected to go below 30 years over the next few months
