By Asina Pornwasin
The Sunday Na
A woman always up for a challenge, Pornthip Kongchun, Google (Thailand)’s first marketing manager has quit the technology multinational and turned her undoubted talents to the world of investment with the launch of a new company known as Jitta.
“I’d been with Google for nine years and felt it was time to use my experience to build a startup,” she says. “I love being in at the beginning of something new and while Google is now firmly established on the Thai market, Jitta is just in its infancy.
“My aim is to provide services to users around the world and that’s a major challenge with a financial startup,” says Jitta’s chief operating officer.
Pornthip’s partners in the new enterprise are Trawut Luangsomboon, a serial entrepreneur and a self-taught value investor, who is filling the chief executive seat; and Sira Sujjinanont, a passionate, highly skilled, full-stack developer with more than 17 years of experience in software engineering, who holds the reins as chief technology officer.
Jitta is ready to rock the world in 2016 and is also looking ahead to 2017, when the three founders plan to conquer 10 markets, namely Thailand, US, Singapore, Vietnam, Japan, Hong Kong, China, India, the UK and Germany. The rest of the world will follow in 2018.
In mathematical terms, that means Jitta is aiming to acquire 10 per cent of the total 200 million investors in these 10 stock markets and have 20 million users by 2020.
Three different business models have been designed to achieve that goal. Under the first, the Jitta Freemium, users can use Jitta Basic free of charge or pay US$30 (approximately Bt1,000) per month per data [stock] market for the advanced features (Jitta Pro). About 90 per cent of Jitta’s core features fall into the basic category.
The second business model is a trading service, with revenue coming from trading commissions. Here, Jitta will work with brokers to facilitate trading via Jitta. It will start this business model in the US market in the second half of this year. Commission for the company will be 50 US cents per trading transaction.
The third model is to provide trading funds through the Jitta algorithm. Under this business model, Jitta will initially work with wealth management experts who hold a trading fund license. These experts will adopt the Jitta algorithm for trading and the revenue for Jitta will be shared, with half of the performance fee going to the trading fund. In the longer term, Jitta plans to establish its own trading fund using artificial intelligence or AI. With this model, Jitta becomes a “robo adviser” for fundamental values investment through the use of AI.
The trading fund is the largest potential market for Jitta. In Thailand, around 400,000 active investors (from a total of one million trading accounts) are putting their money into the funds and some four million people are involved in the actual trading. In the US, the largest trading fund has a total trading value of $3 trillion.
“We will launch the third model in Thailand and the US this year. We have already negotiated with several funds but obviously cannot disclose any details,” Pornthip says.
Jitta’s role, she stresses, is to seek stocks of companies that they believe the market has undervalued and which are trading at less than their instrinsic value.
“We are not yet successful as we are really only starting. Our four seed round fundraisers have netted a total of $3 million. The latest round is earmarked to expand the numbers of markets. That will be followed by venture capital fundraising before the end of 2017,” Pornthip explains.
Jitta is also gearing up to become a platform for investment by providing a financial ecosystem for partners to create and add their value. The company has already opened the application protocol interface (API) to allow developers to use Jitta’s assets to develop further services.
“Jitta will play a platform role in a similar way to Google and Facebook. Take Google Maps: others are welcome to add one service on top, but users need to come to the platform to use such services,” she says.
Trawut adds that Jitta has been created using the lean startup formula. The partners spent 2014 and 2015, developing the minimum viable product (MVP) offering just enough features to allow early users to try it out. This enabled them to gather validated learning about the product and its continued development. Jitta is currently is available on web and mobile sites and will launch a native app for iOS devices next month. Android devices will follow later.
Trawut, who is dedicated to value investing and believes investing is for everyone, has done plenty of research, digging through 3,000 financial statements of companies on the US Stock Market. “That taught me value investing is not easy for everyone and that much time is needed to study financial statements and do analyses. Jitta will streamline the investment decision-making and generate better returns with a simple method we are calling ‘Buy a Wonderful Company at a Fair Price’.
“We developed Jitta from our own algorithm, which was based on my personal investing experience. Key features include the Jitta Score, which presents that wonderful company; Jitta Line, indicating a fair value; Jitta Checklist, allowing investors to customise their decision-making criteria; and Jitta Loss Change and Intelligent Portfolio, which minimise the investment risk,” Trawut explains.
“The Jitta algorithm ranks stocks based on the Jitta Score and Jitta Line. Since 2009, Jitta’s return on investment has been 400-per-cent greater than the S&P 500 so users will be able to buy a wonderful company at a fair price.”
Jitta is now expanding to include several more stock market data in the potential countries. “We are now ready to go to those markets to acquire users and for this, we are working with local strategic partners. For example, in Singapore we are partnering with Value Investing College, Mindkinesis, Eight Innovation Education, and Share Investor, the top financial website for investment,” he says.
“The middle class is showing increasing interest in transnational trade and Jitta’s job is to help these people to invest in key stock markets around the world,” Trawut adds.
“Apart from stock market data we acquire, we also focus on user experience and user interface to present the same format data pattern across the different stock markets. Jitta users will experience the same. If they can use Jitta to trade in one stock market, they will do the same in all stock markets where our service is available,” Trawut adds.
Some 1.4 billion of the global population are estimated to have savings of more than $10,000 and they, along with the 200 million existing individual investors in the 10 potential markets, are the company’s primary targets.
“We want to help early adopters to become confident investors while empowering existing individual investors,” says Trawut.
By the end of 2015, Jitta had 50,000 active users through its invitation only model. Now open to everyone, it aims to grow to 500,000 active users by the end of this year and is planning to double its staff from 10 to 20.
Jitta also has another card up its sleeve. One of its advisers is Mary Buffett, former daughter-in-law of legendary value-investment guru Warren and the best-selling author of “Buffettology”.
This week the co-founders are heading to Silicon Valley where they, along with 52 other startups, will show their services at the Startup Grind.
They should impress too, demonstrating that Jitta is an intelligent finance platform taking aim at the S&P 500 as the “new normal” for trading returns. The practice is simple, “Buy a Wonderful company at a Fair Price”, but the algorithmic technology behind the tool is nothing short of inspired.