We started in India but we always wanted to be a global startup

The company’s business-to-business (B2B) clients form 60% of its client base, and include brokerages such as HDFC Securities, Motilal Oswal, ICICI Securities and IIFL Securities. This is probably one of the reasons why Trendlyne is profitable. “The trendline turned EBITDA positive in FY2022 and the trend is continuing,” says Yashodharan, co-founder and chief marketing officer.

In an interview with Mint, Yashodharan and Pabreja, Founder and CEO, talk about their flagship products- Stock Screeners and Alpha Alerts. Trendlyne is all set to enter international markets. It is also gearing up to enable transactions on its website and app. Edited excerpts from the interview.

Give us a brief description of the trendline.

Yashodharan: We are a stock analytics company that caters to both B2B and B2C (Business-to-Consumer) clients. This has been our identity since the beginning. We have not done any transaction on the website and app. This year that is going to change as we are introducing some transactional products.

The first product we launched was Stock Screeners. With this, you can screen stocks using system queries. You can also create your own screeners. Then we launched the DVM (Durability, Valuation and Momentum) Stock Score. It basically gives a score for every stock across financial quality, valuation and momentum.

There are a lot of news and tips in the Indian market. But how does a retail investor get enough time to scan a stock in detail – look at the financials and management, check whether there are auditing issues, or whether valuations are too expensive. So, we have tried to give this information based on these three points at the top. And it has proved to be extremely popular among users as it not only helps one find potential upside stocks, but you can also avoid investing in stocks that have a sharp downside risk. For example, there are many startups that have been listed recently. Their scores clearly show that they are running in huge losses. There is no manual intervention and it is completely an automated rule-based scoring.

Our business model has been to build analytics products that have a clear market reach. For example, we are the only player in India that does back-testing at the query level. So, you can write a query for a screener, say I want to look for stocks with a certain revenue and profit growth, and run a screener and then back-test to see that it actually whether it has historically performed well or not.

Our ‘Alpha Alert’ has also proved very popular. You can set real time alerts on corporate announcements, bonus splits, target prices, celebrity investors buying stocks, etc. A lot of unstructured and structured data is part of our alert mechanism. The unique thing about Alpha Alerts is their wide range.

One can get screeners and alerts from other sources as well. Why join Trendline?

Yashodharan: For example, what’s different about our screeners is that we have the largest parameter base in the industry. We have approximately 1,200 parameters that you can run the screener on. Many other websites and apps, screener.in being an exception, take these parameters from external vendors like Refinitiv for example. Therefore, they have a limited set of data.

We create our own data feeds and this makes us unique in the market. We do not only take data feeds from financial market data vendors such as CMOTS and Dion. We are able to provide alerts based on unstructured data. For example, you can set up real-time alerts for results announced where net profit growth has been greater than zero for all of your portfolio watchlist stocks.

Pubreja: Let me give you an example. We have data feed on FII (Foreign Institutional Investor) and DII (Domestic Institutional Investor) and it is a combination of about seven to eight sources. This allows you to analyze the overall FII and DII activity in the market. We compile trading data from various corporate filings, and provide it in a consolidated manner. Also, there are many scanned PDFs in corporate filings. TrendLine allows you to search these documents using keywords.

How has your business grown since launch in terms of user base, monetization etc.?

Yashodharan: We launched our first product, a screener, in mid-2017. We gave it away for free for almost a year. We were not trying to monetize and were trying to figure out the business model. We have grown very fast. For example, during the last year, we had 350 million page views annually. In the last 12 months, our website and app had approximately 1.1 million unique users per month (all B2C). We are a profitable startup and haven’t used much of the money we raised.

We started in India but we always wanted to be a multi-geo startup. The advantage of launching in the Indian market is that the exchange charges, especially for delayed data, and vendor charges for the data feed used to build these analytics products are relatively low. So, we were able to build a fairly mature suite of products for India, which we are now taking to the US, UK and Canada markets in March. We became EBITDA positive in FY2022 and this trend continues in FY2023.

How much of your business comes from B2B and B2C customers?

Yashodharan: When markets are up, we are on B2B:B2C in the ratio of 50:50. Since the market became volatile, we got a large number of B2B customers, and it is now around 60:40. We have around 21 B2B clients in India, mainly brokerages, such as HDFC Securities, Motilal Oswal, ICICI Securities, IIFL Securities and PhonePe and 5Paisa. They primarily take our analysis, and we also have revenue-sharing propositions like portfolio provided to them. You must have noticed a big change in the last few years in terms of how brokerage apps look – earlier, they were very transaction driven, now you see screeners and much more detailed analysis on these apps. We are using it extensively for our customers.

Will your entry into the international market affect your profitability?

Pubreja: Yes, for a few years, and that’s why we raised the money. We haven’t spent any of our pre-Series A funding that we raised about a year and a half ago as we remain profitable.

India’s geography is self-sufficient, and can in fact power transactional products as well. But then we didn’t know how the next few years would pan out and that’s why we raised Series A funding.

The target audience will be residents of the US, UK and Canada. The market size is about nine times that of India and the paying capacity is also about four to five times bigger. So, the opportunity is huge, like 20x-30x.

Are your clients essentially users of fundamental stock analysis?

Yashodharan: They used to be mainly long term investors, but we have launched many products for technical investors as well. We have included a lot of technical parameters in our screener system for traders. We have a futures and options dashboard and analytics, and we’re building it out to a great extent. Hence, we have started getting more customers from this region.

Do you have in-house research team?

Yashodharan: We are still a majority tech company. But in the last two years, we have built a content and research team. So now we have about 10 people, some of them are registered analysts and are writing and creating screeners for us. We have a fairly detailed analysis going on on the content side as well. We don’t make any recommendations.

There’s no one person behind what’s on the website right now, unless you’re looking for management resignations and other such details where you have some auditing to make sure it’s correct.

Are you integrated with any execution platforms? Can your registered users execute trendline strategies seamlessly with your broker?

Yashodharan:This is one of the transactional products that we are launching this year. Hence, till now users have not been able to execute their screeners and trades on the trendline. We are providing a trading gateway for investors to do this.

The second product that we are launching is a basket product. So, for example, you can create a screener on a trendline and convert it into a basket of stocks for trading through a broker. It’s a smallcase-like product, but it’s not smallcase. We made it all by ourselves. It has some differences from smallcase; For example, you can do an equity plus mutual fund basket using this particular product.

Pubreja: The product is called Grobox (https://grobox.indiainfoline.com/) and is already live as a white label product. We are using the opportunity of a soft launch with IIFL to ensure that the product works well from end to end. You will soon see it launch with five brokers.