[Transcript] #23: Stock trading services (African WealthTech Pt 1) - How retail investment platforms are racing to build the African Robinhood and Zerodha
Recorded Feb 21, 2021
Hey! Bankole here.
I’m excited to share the transcript for our episode on Africa’s Wealthtech scene. This one’s focused on an entire industry, so it’s longer than usual, but it’s still packed with everything you need to know.
We started the episode looking at WealthTech globally, comparing the success stories of Robinhood in the US and Zerodha in India, two platforms that have disrupted the traditional brokerage industry. We then shift our focus to Africa, where a new wave of platforms are meeting the growing demand for global investment opportunities and diversification.
These companies may seem similar, but they’re quite different in how they make money. Robinhood offers commission-free trades, but earns revenue by sending orders to different market-makers. Most African wealthtech startups offer access to the US stock market, charging a percentage-based commission. Unlike their African counterparts, Zerodha focuses on providing flat-fee access to the Indian stock market, in contrast to established brokerages that charge percentage-based fees.
However, the recent cooling in the US stock market is not be a good sign for these companies. We know there’s reduced investor activity in economic downturns, and this will have impacted Africa’s already low stock market participation rates. In Nigeria, we’ve already seen mergers and we’ll undoubtedly see more consolidation. It’s clear that a company's business model does not only decide how big it can become, but also how resilient it can be in hard times. This is another one to watch closely.
Listen to the full episode here. Paid subscribers can access the full transcript below.
As always, thank you for listening and sharing.
[00:00:00] Olumide Ogunsanwo: Welcome to Afrobility, a conversation about African business and technology. Today, we're going to talk about WealthTech and the rise of retail investment platforms in Africa. We'll start with some global context of investment and trading, review investment platforms in India and China, and then we'll dive into Africa's personal investment landscape and end with our general thoughts and overall outlook.
This episode was recorded on February 21, 2021.
[00:00:45] Olumide Ogunsanwo: Which is fine. I'm good. I'm good. I'm good. Ready to talk about wealth tech. And making money. I prefer to use the term investment tech, invest tech, but I think the popularly used term is wealth tech. That's what we're going to be talking about today. Yeah,
[00:01:00] Bankole Makanju: yeah. And I think we'll be generally customer focused or individual focused or B2C focused versus B2B.
[00:01:07] Bankole Makanju: It's not a clear thing. There's not a lot of B2B Wealthtech, especially in Africa,