An ex-Deutsche Bank MD who made $1 billion for clients built an app to teach students to invest
LONDON — Kerim Derhalli likes to joke that he spent most of his career at banks that “have either gone bust, almost one bust, or should have gone bust.”
“JPMorgan merged with Chase. Bankers Trust got brought out of Deutsche Bank. Lehman Brothers went bust. Bank of America bought Merrill Lynch and then Deutsche Bank is Deutsche Bank — who knows!” Derhalli told Business Insider recently.
“I wasn’t aware of any of the things that were going on,” said Derhalli, who left in 2012. “What I always tell people is don’t leave a job for negative reasons, always do something positively. There was a lot that was wrong in the industry but, actually, I thought there’s just this massive opportunity.”
The “opportunity” was the chance to blend social media with finance in an app that Derhalli set up in 2013 called Invstr.
“What I realised is finance is purely digital and it’s all about people. Digital and people, to me that just spelled social media and social technology. We can use that to revolutionise the way that the financial industry operates.”
Invstr aims to “help people learn how to become great investors,” Derhalli says. “Learning to become an investor is like learning to play a musical instrument or learning to play a sport. When you play a sport, you’ve got to get fit, you’ve got to practice your skills, and then you’ve got to out and perform in the real world.
“For us, getting fit in a financial sense is about three things: understanding the world, which is why we provide access to about 50 different news wires, calendars of economic and corporate events, research reports; the second bit is you’ve got to follow the markets and see how the markets move in relation to the news — we provide streaming real-time data on 1,500 instruments; and the third thing is you need to talk to people because markets are made up of people and you need to understand how they’re thinking.”
As well as giving people the tools to understand how markets work in a social way, Invstr lets them practice too. The app features games that mimic trading, showing whether you are gaining or losing money.
Derhalli says: “When it comes to practising skills, what I tell people is there’s really only one basic skill you need to know — is the market going up or is it going down? That’s it. If you get that right, you make a fortune. That’s all that Warren Buffett has done — if I buy it is it going to go up, if I sell it is it going to go down?”
Invstr runs a “freemium model,” offering the games, app and news for free but charging for additional features such as data analysis and the “Invstr Academy” tutorial.
The tutorial feature, described by Derhalli as “a little like Duolingo for finance”, will be based on an e-book Derhalli is writing. He was described as a City “high-flier” in a 2003 court case against former employer Lehman Brothers and Derhalli told BI: “I made about $1 billion in my career, unfortunately for other people, clients, not myself. The book is taking all of the lessons I’ve learned and my interactions with brilliant investors, taking that and in a very practical way, leaving out all the jargon and the formulae, and explaining what makes things go up and what makes it go down. That’s all that people need to know.”
Invstr is also teaming up with a US brokerage to offer real stock trading features in the app, which will offer another revenue stream.
Derhalli has been working on the app for four years now and there have been three versions launched since start. The most recent version come out last summer and all versions of the app have been downloaded over 220,000 times by people across 164 countries. “We know there’s a market there,” Derhalli says.
Invstr is now ready to push its app to the public and is targeting students on economics and businesses courses as a way to grow. Students from over 100 leading universities in the world — including Oxford, Cambridge, Stanford, Harvard, and Cornell — already use the app and Derhalli is doing university tours, recruiting campus ambassadors, and forging links with professors. The startup also runs a student investing competition, offering prizes such as internships.
“We think there are hundreds of millions of people out there who want to take charge of investment, just like they’ve taken charge of everything else in their lives,” he says.
Derhalli and one other unnamed private investor have bankrolled Invstr since launch and he describes it as “a very expensive project, we’ve built world-leading technology.” The company employs roughly 30 people around the world.
Asked if he’s looking to raise money, Derhalli said: “You can never say you don’t need money. Money is always useful.
“The car is there, the engine is revving, it just needs a bit of fuel and someone to put their foot on the accelerator. For someone looking to invest, I think it’s a fantastic investment opportunity.”
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