August 30, 2017
If you expect that in the ranking of the world’s most promising FinTech startups, only nascent companies are created by young entrepreneurs, you are mistaken. The exception is a 49-year-old brokerage firm popularly known as Easynvest. Currently, with more than 200,000 active users and more than R$12 billion assets in custody, the firm has managed to reinvent itself and has grown with the latest technology. Easynvest saw a 3X growth in revenue in 2016 compared to the previous year. Moreover, the business was able to grow its customer base from 45,000 users in 2015 to 200,000 users today.
Paulo Avian, the company's Chief Strategy Officer, reveals the changes that Easynvest has done to make such growth possible, as well as emphasizing the ways he differentiates the company in the market.
Easynvest today looks like a startup. How did this happen?
Paulo Avian (PA): There is a lot of confusion about how to define a startup. Easynvest is definitely not a new company, but it is a company that has decided to change the way we do business in the last few years.
I started working at Easynvest eight years ago and saw several waves of transformation from a traditional financial market brokerage, not much different from all others, to a bold organization with the aim of doing things differently. And we have partners who bought the idea.
I think it's a success story because we have grown very well, have been very profitable, and have the money to fulfill the business ambitions that we have today. So we did not go through the downside of being a startup, which would be the financial struggle.
Have you sought capital funding recently?
PA: We do not need capital funding today. One ambition we had was to have a strategic partner who would help us to refine the business and help us gain access and knowledge to do more than what we could do by ourselves.
In this context, we brought a new partner this year, which is pending approval by the Central Bank. But both sides approved the business. Nyx Participações S.A., a company controlled by funds and managed by Advent, has signed a binding agreement to acquire a minority interest in Easynvest.
We are very much in line with the vision of making an offer for the Brazilian investor who is focused on the online environment. We are also focused on providing superior customer experience and confidence for those who are making their first and subsequent investments.
You do not make buying and selling stock recommendations. On the other hand, Easynvest has invested in communications that will inform investors. Why is that?
PA: There are levels of recommendation that you can do for the customer. What we do is to teach the investor to take his next investment step.
So, we do not have active investment management. This is good on two sides: first, because I do not need to be skilled in a business many times. My client ends up knowing better than I do if he is a guy who cares about educating himself about the stock market.
Second, I do not have an incentive problem for the brokerage firm itself. We have a problem in our industry that there are many brokerages that want to make recommendations to generate business.
Since we do not make the recommendations, we just want to start a business that will benefit customers. That way, we align our concerns very well with what the investor is looking for. We do not recommend stocks; we talk about the existing financial products so that investors can make informed decisions.
Easynvest does not charge for Treasury Direct custody. Did the popularization of the Treasury Direct help in the growth of the brokerage house?
PA: It helped, especially when you look at the risk-return relationship, which is one of the first considerations that an investor should make when he is starting something new. It's very positive when you talk about government bonds, and the easiest way to get it is by the Treasury Direct.
So, we look at this product as a first step in the investment life that may become more sophisticated for our customers. So when he comes out of the savings account and goes to TreasuryDirect, he already has much higher financial feedback than he would have in his bank, thus adding zero risk. And as he has a journey along with Easynvest, we hope we are able to educate him enough to take a few more ambitious steps toward investing.
In the current economic scenario, the Treasury Direct and private fixed income – which are products that we offer more easily than anyone and at a low price – are still very attractive to the investor.
Talking about fintechs and startups, do you plan to partner with these companies to develop products and services?
PA: We are always on guard and we always try to connect with several companies because we have a lot to learn from one another. But we understand that the type of offers we have today for the Brazilian market is still very attractive, so we do not need to change our business model.