The idea for Thndr sprouted back in 2016 as I was advising on the sale of a bank. I realized how inaccessible financial products were to the general population. This is when I decided to make investing accessible to everyone my lifetime mission.
As for my cofounder, Seif Amr, his drivers stem from his own experiences opening his first investment account in Egypt in 2016 and, as a digital-first millennial that had zero investing background then, how he found the process extremely difficult. Fast forward to today, most of the money that Seif actually made came from investments he made early on and not from his salary. Through Thndr, his goal is to ensure that no one has to go through any of these negative experiences again and that everyone should have equal opportunity to increase their income.
Regarding the gap, before technology financial service institutions had to have branches all over the country to attract new users and then a fleet of account managers to service those clients. This expensive way of doing business is what made financial institutions focus on building their products and services for the rich people. At Thndr we are solving problems by using technology to lower the cost of attracting and servicing clients. Think about it this way, with a press of a button, millions of people download the app and start having access to financial services.
We launched the app publicly in December 2020.
How did you go from idea to execution? What kind of funding did you need to launch the app? What were your biggest obstacles to seeing your idea to execution? Did you have any specific requirements with the FRA to obtain your license?
So for us to go from idea to execution, it had to start with understanding how this exciting new world of technology companies operates. We were lucky because we got the chance to work at one of the most exciting tech companies in the world, Uber. I joined the S&P team and then got promoted to General Manager Egypt while Seif joined the Egypt operations team and then transitioned to a regional role for MENA. Our journey at Uber taught us how to use technology to offer a comprehensive and seamless experience that is built around the user.
Get backing and support from the right set of investors who believe in our mission, have seen before products and businesses built on technology, and have access to the relevant network. We managed to include YCombinator, the biggest incubator in the world that backed companies like Airbnb and Stripe, Endure Capital, 4DX Ventures, Raba Partnerships, and then Global Ventures, JIMCO, Plus VC, and Pando Trees.
Initiate engagement with the regulator in Egypt. On August 12, 2020, we received our brokerage license from the Financial Regulatory Authority (FRA), granting us authorization to conduct securities brokerage services in Egypt. Receiving the first brokerage license to be issued in Egypt in over a decade was a huge milestone for Thndr. We are grateful for the support of a progressive Financial Regulator Authority that is strongly committed to seeking modern methodologies to enhance the investment landscape in Egypt and pave the way for financial inclusion.
Are you just a trading platform, or do you also offer investment advice (access to fundamental research or technical analysis)? What services do you offer in addition to online trading?
Thndr is the easiest way to invest in Egypt. We are building a platform whereby anyone can invest regardless of his financial knowledge or the size of his pocket. We are doing this by focusing on four pillars:
- Push on Education: Empower our individuals with the right knowledge to successfully maneuver through their investment journey. Educational material is designed and delivered in a manner that is compatible with how everyday individuals are currently consuming publicly available information and data
- Relevant and Intuitive Platform: Mobile-first easy account opening, relevant interface, and hand-holding focused experience. Getting the modern experience seen in Uber, Amazon, Talabat, etc. to the investment world
- Removing barriers: Users can open and manage accounts without visiting branches or access to restrictive capital. We are digital and don't need to have minimum account balances
- Investment Supermarket: Providing access to all relevant investment products whether local or abroad (non-local products not yet announced though)
We do not offer investment advice, but empower our users with tools, resources, and publicly available information that aid them in making smart investment decisions
How do you onboard clients? Can you walk us through the process of becoming a client? What compliance/KYC measures do you take to ensure adherence with FRA regulations?
Easy access to our platform comes at the core of what we are doing. Anyone can download our app (iOS or Android) and then signup with their email to get access to our simulator, news, community, and other features. Once they feel they are ready to start investing, they fill in a form through the application, take a photo of their ID, and they undergo a liveness check that is also used for facial matching. This information, among others, is then checked using mechanically and manually to ensure validity. Once approved, we then send someone from our team to your doorstep for the physical signature of the contracts. We have been working closely with the Financial Regulatory Authority on removing this physical signature piece and having a framework for a fully digital onboarding process to be applied once the regulations allow for it.
Can you offer any statistics on your app usage:
- 200,000+ signups are using the platform to learn and invest
- 87% of clients are first-time investors
- Average age is 29 compared to 45-50 in other brokers (50% of Egypt’s population is between the ages of 15 and 45)
- 40% of our clients come from rural areas, with no access to financial institutions
- Average wallet size is USD2,000
Can you offer any information on your user statistics about the most recent IPO (e-finance) with regards to number of clients who participated, the average number of shares bought (as well as value amount), and/or any other interesting insight?
The initial public offering (IPO) of e-finance is our first notable IPO at Thndr and we are very proud of what was achieved, and we are very keen on reflecting on the learning that we obtained. Orders through Thndr accounted for roughly 12% of all market orders and covered 72% of the size of the retail offering, which truly signifies the power and potential of everyday investors. Looking closer into these orders, 61% were less than USD500. Without Thndr, these individuals would have probably been locked out of this great wealth-generating opportunity given the minimum account balances of traditional institutions.
It should also be noted that the Financial Regulatory Authority (FRA) and the Egyptian Exchange (EGX) have been very supportive, to the point that they extended daily work hours by 6 hours and worked on weekends to accommodate the huge influx of demand coming through Thndr.
Can you compare your business model with that of traditional brokerage firms that offer online trading services? Why should a client pick you over a bigger player (EFG Hermes, CI Capital, Beltone, etc)?
To give you some context, only 0.4% of Egyptians are investing compared to 50% of households in the US. So it is more a matter of access and availing investing to everyday individuals. I think a big focus for us at Thndr is building this platform for everyone and making sure that our users are enjoying the platform and comfortably using it the same way they are using Amazon, Anghami, Instagram, and the other apps.
What does innovation look like for an online brokerage firm?
To us generally, innovation in the brokerage space comes in the following 3 forms: efficient operations, distribution, and seamless transformation.
Unlike general life, day-to-day operations in Egypt’s brokerage space have not changed much in the past few decades. The process of opening and managing an account is still pretty much analog. With the rise of technology, we can now semi or fully automate many of the core functions that relate to opening accounts, executing orders, and monitoring activity. This naturally reduces the costs associated with manual labor as well as the risk of human error. At Thndr, our brokerage team members are less than 10 individuals and we don’t see this changing as we scale.
Through technology, we are now at a point where we don’t need to have physical branches to acquire or service clients. This obviously reduces a majority of the fixed expenses and allows us to quickly access far-reaching areas. At Thndr, the cost to acquire a new client is a fraction of that of traditional brokers. Moreover, around 40% of our users come from rural areas
All financial institutions are difficult to manage. This is not only because of the real-life applications that are being digitized but also because of the many integrations with external entities that operate in the space. In the case of Thndr, our main connections are with exchanges, banks, clearance houses, custodians, asset managers, and background check providers. A simple operation like opening an account or executing a trade will likely involve most, if not all, of the aforementioned entities. Through technology, we can now simplify, hasten, and automate many of those applications so that our users get what they want through a few taps on their very simple and intuitive mobile interface. We are still in very early stages in this specific point, given how outdated the infrastructure in our region is, and it is where we intend to put a lot of focus in the near term.
What are your clients’ biggest complaints and how do you address them?
Two big complaints are 1) physical signature, which drags the account opening process, and (2) limited funding options. We have been working closely with the regulator, which has been very supportive of addressing these two bottlenecks.
What are your next plans? Do you plan to offer trading in regional markets or key commodities?
We should be announcing a very exciting round very soon. The plan is to continue investing in developing our platform further to make it easier and more intuitive as well as adding more investment products that cater to different needs and objectives. We are also eying expansion into the GCC. Our platform is built for the Arabic-speaking population and our dream is for everyone in this region to be able to easily make money through investing in the investment products that suit their needs.
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