MProfit | Does your 5x return really beat inflation?

We all do some basic mental math when discussing house prices. Or, well, at least some uncles do. You know, the ones who say they have great investment now because they bought their house for 10 lakh some ~30 years ago. They say their house is now worth 5x or 10x what they bought it at. This doesn’t really help when comparing the return to inflation or other asset classes such as equities, however. To turn it into a return requires two additional factors — time and cash flows. And it’s almost impossible to do that calculation in one’s head.

This is the problem that the founders of MProfit are trying to solve. 

Watch our chat with the 3 out of the 5 co-founders of MProfit:

Spreadsheets require practice

Investors should know the internal rate of return or IRRs of their portfolio as well as individual investments to be able to make better decisions. Indeed, this is the first step, as they should then also subsequently look at ‘risk-adjusted returns’. Of course, any finance student should be able to work out their IRR in a spreadsheet. But not all investors learn spreadsheets. 

More importantly, investors may not have all the data handy to be able to do the calculations easily. As the founders point out, there are cash flows and corporate events that create a long data trail.

Transaction history as source of truth for equity/fund investing

Many retail investors turn to their broker platform or their news information platform to help them with keeping track of their investments. But, again, the founders of MProfit point out that investors tend to buy and sell on different platforms, creating paperwork in multiple formats, which the free and basic platforms are not able to handle.

Nor should they. After all, it’s a separate, valuable service. Technology can help, but it costs to create and maintain the technology, as it does to acquire and clean the data.

The key difference between MProfit and the free media platforms is that it focuses on storing transaction data rather than holding data. It can import documents from most brokers and RTAs. Hence, it makes it easy for any investor to keep track of multiple product categories and asset classes.

Aiming at B2B and sophisticated investors

MProfit is available to anyone as a SaaS product. The founders admit that the main application is in the B2B segment — chartered accountants, wealth managers and family offices.

Having seen wealth management evolve over the past 15-odd years, Kiran Shah, the CEO, believes the industry is just getting started. He is very optimistic about the affluent segment in addition to the high net-worth cream layer. The second generation of co-founders are also optimistic because they see the wealth transfer from the boomer generation to millennials as being a key driver of the latter getting involved in the investment decision-making process of their family wealth.

The company has raised money to make their product offering better. It has yet to really start its marketing efforts.

Zerodha has been vocal about sticking to its core expertise and partnering with specialists. MProfit is one such specialist in a niche area, that can help Zerodha investors in doing better with their money.