A Tale of Two Pivots: Transitioning from RAINFund, to RAINTrader, to TradingRooms
In 2019, when RAIN Platforms was incorporated, the company’s mission was to democratize the financial markets by providing the retail public access to institutional-grade trading strategies. In other words, how could a middle class citizen get access to the same types of strategies normally only available to hedge funds and high net-worth individuals (HNI’s)?
We accomplished this by launching RAINFund.
The idea behind RAINFund was simple. We would build fully automated trading strategies, in-house, and then deploy these strategies on to our clients’ brokerage accounts. The entire backbone was powered by algorithmic trading and API-enabled brokers. The strategies were fully automated and algorithmic in nature, built by our talented in-house team of quants and programmers. In turn, the strategies were then repackaged into a neat trading application which would run on the end client’s brokerage account via API trading.
The concept worked beautifully. By the end of our first year, we had close to a thousand retail clients, each funding their accounts with at least Rs. 10 lakhs (~$15,000) and no more than Rs. 1 Crore (~$150,000). However, by mid 2020, we realized that this was not a scalable business due to the fact that we had to be concerned with two business metrics:
- Number of clients
- Return on investment (ROI)
Since the ticket size was small, it became obvious to us that this wasn’t going to pan out well in the long run. Although we had generated our clients very good returns (at the time of RAINFund closing, our CAGR was in excess of 30%), we had to pivot the business into a new direction, one which was more scalable and sustainable for the long run.
We made the difficult decision to shutdown RAINFund in September of 2020. However, our clients understood our situation and encouraged our pivot, and many of them subscribed to our next product.
In late 2020, we pivoted the business to RAINTrader.
RAINTrader was launched in Beta in early 2021, and formally in July 2021. Here is a press article detailing the launch.
RAINTrader, essentially, was a “Netflix for algorithmic trading”. Users could come to RAINTrader and choose algorithmic trading strategies in a A-La-Carte fashion. Once selected, the strategy would run on the user’s mapped brokerage account via API trading.
Most of our clients from RAINFund migrated to RAINTrader. The major difference between the two offerings was that as a company, we were not responsible for the users’ decision making. Instead, users had to select their own strategies.
The product worked extremely well. By the end of 2021, we had more than 10,000 users registered on the product. Since it was a marketplace, RAINTrader encouraged quants to submit strategies. This allowed RAIN to solely focus on building the best user experience for its users.
However, by October, 2021, we saw the limitations of RAINTrader. While the product did exactly what it was supposed to do, it prevented discretionary traders from participating. There were also little to no social elements on the platform. As a result, we quickly went to work and launched our final product, TradingRooms, in January of 2022.
We unveiled TradingRooms™ as India’s first automated social investing and trading platform.
TradingRooms™ is a huge improvement over RAINTrader. On TradingRooms™,
- both discretionary traders and algorithmic traders can setup their own trading environments, directly on the platform
- Each environment is called a Room
- The “expert” trader is called the Room Owner
- Users can come in and subscribe to experts as a Room Member
The basic pain point we are addressing with TradingRooms™ is simple: DIY, discretionary trading is stressful, anxiety-ridden, and time consuming for the average trader looking to actively participate with the stock markets. Instead of trading on your own, there exists a better way to trade: discover an expert trader and let the expert guide your trading decisions for you.
TradingRooms™, like RAINTrader and RAINFund, is built on the backbone of API trading. API-enabled brokers are what allow the magic to happen. Users come in, link their API-enabled brokerage accounts, subscribe to Rooms, and watch the trades get automatically taken on their brokerage accounts.
Users have the liberty of customization and personalization. For example, a Room Member can choose either fully automated trading or 1-click-execution for their trading activity. Fully automated trading means the trades are taken automatically with no human intervention. 1-click-execution requires the Room Member to approve the trade before it gets taken on their brokerage account.
Perhaps the greatest tenet of TradingRooms™ is that is highly social in nature. Room Owners have the ability to chat and socialize with their Members. There is also a Wall functionality which allows Room Owners the ability to post content and build up a personal brand, not unlike a LinkedIn or a Twitter. In the future, we envision TradingRooms™ to be the preferred social network for traders to conduct their trading activities, gain subscribers, and build up powerful personal brands.
TradingRooms™ is currently available on the Web, and a mobile application is launching in a couple months.
Needless to say, while we don’t regret the pivots we made, we don’t expect any more of them in the future!