New investor app taps Gulf’s appetite for stocks and shares

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• Platform supports growing community of non-professional investors
• Global pandemic drove up use of e-trading in past two years  
• Retail investors accounted for 9% of Mena’s $1.2trn of AUM in 2021

InvestSky, a social investing platform, has raised $3.4 million in a pre-seed funding round led by venture capital fund Emkan Capital. 

The Dubai startup aims to use the cash to make investing more inclusive for a “new generation of investors in the GCC”, it said. 

InvestSky’s commission-free platform is aimed at retail investors – non-professional investors who buy and sell securities, mutual funds or exchange traded funds (ETFs) through a broker or savings account. 

The platform allows users to buy fractional stocks starting from $1 (AED3.67) and provides a social community for users to collaborate on their ventures.

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“We founded InvestSky on the recognition that retail investors are a hugely influential group across the Middle East, yet the offering for them is clearly lagging behind,” the company’s chief executive Nitish Mittal said.

“The region has not scratched the surface when it comes to the engagement and education of retail investors, especially considering the significant purchasing power, high GDP [gross domestic product] per capita and beneficial demographics.”

Gulf consumers’ appetite for retail investing has grown over the past two years, as the global pandemic drove up use of e-trading platforms against a backdrop of economic uncertainty and increased digitalisation. 

Retail investors are now one of the most important segments in the Middle East’s asset management industry, accounting for 9 percent of the region’s total of $1.2 trillion of assets under management (AUM) in the region in 2021, according to a report by Boston Consulting Group (BCG) in May 2022.

They also outpaced institutional AUM, at 3 percent of the total, as a source of capital growth that year, the report said. Overall Middle East AUM grew by 16 percent in 2021, “significantly above” the 10-year growth average, said BCG.  

Globally, retail investors are expected to account for more than 61 percent of total assets under management by 2030, up from 51 percent in 2021, says consulting firm Indefi. 

InvestSky’s funding announcement came as the UAE ranked as the 5th “most stock-obsessed” country worldwide in a study published by UK financial services provider CMC Markets. 

The study examined Google Trends data of search terms frequently used by people interested in stocks and trading in English-speaking countries. These terms were then combined to give each country a total score to discover which have been the most interested in stocks in the past 12 months. 

It found that the UAE is the fourth country most interested in the term “swing trading” – a style of trading that attempts to capture short-to-medium-term stock gains over a period of several days or weeks – and the fifth country most interested in “day trading”, which involves buying and selling securities within a day, or within seconds.

Singapore, India, Canada and the US were the top four countries most interested in stocks and shares in CMC Markets’ study. 

InvestSky was set up in 2021 by Mittal and co-founder Turki Alshaikh and holds an operating licence from the Dubai Financial Services Authority, regulator of the financial free zone Dubai International Financial Centre. 

The pre-seed funding round was led by Emkan, which focuses on early-stage technology investment, and included prominent local investors S3 Ventures, the Al Romaizan family office, food delivery app Jahez’s deputy chief executive Mishal Al Mishari, and other angel investors.

Ghassan Aloshban, general partner of Emkan, said: “InvestSky has built a world-class product that could easily compete with the best trading platforms globally. 

“This, coupled with an addressable market of roughly $1.2 trillion in retail investment flows in the Middle East and North Africa [according to BCG] and roughly eight million retail investors in the GCC alone make for an incredibly exciting opportunity to capture market share with social trading.”