Meet Startup of the Week, Smart Trade. Started and based in Japan, Smart Trade is a quantitative trading platform which allows engineers to develop, use and share trading algorithms. Using the web app, engineers are able to develop algorithms to evaluate artificial intelligence estimates as well as financial indicators.
For those unfamiliar with the term “quantitative trading”, it is defined as, “Trading strategies formed based on quantitative analysis, which relies on mathematical computations and number crunching to identify trading opportunities”. In recent years, AI, robots and algorithms are on the rise and can be seen across different industries. Especially in the finance industry, investors relying on algorithms are exponentially increasing. In the US alone, quantitative trading amounts to 30% of trading in the stock markets. In China, where quantitative trading was only heard of 10 years ago, amounts to $140 billion yuan and is responsible for 6% of all trading.
So enough of definitions and statistics, I know you must be curious to hear from Smart Trade. Li, one of the co-founders, is here to answer some questions.
So Li, tell us more about the team and how did you guys meet?
Uchida started his career as an entrepreneur while in Tokyo University. He started digital pictures sharing website back then and achieved 1 mil PV/month in 1996, which was acquired to a listed company. After that, he became the CTO of Digital Garage (a listed IT company in Japan).Here, Uchida was in charge of transferring Twitter service to Japan in 2009. Uchida believes that IT will play an integral part in all industries, especially the financial industry, which is still very closed and conservative.
The team met when Uchida held a study meeting session for FinTech back in 2015. Sakukawa ( a talented engineer who began coding at 6 years old) and myself joined that meeting as starting members. That was it. Smart Trade began. In addition, Song, a quants professional and an ex-colleague of mine back in Wall Street, joined the team in 2016.
What are the benefits that Smart Trade brings to users as well as the stock market? Why did you come up with the idea of SmartTrade with AI algorithms?
Till now, quantitative trading has been known as a black box, used only by financial institutions and professional investors. For most of us, we simply do not have the resources to do it by ourselves. Therefore, we do not have enough information to understand or choose suitable trading strategies.
Hence, Smart Trade’s proposal is to provide all necessary resources and a conducive environment, i.e. an open website platform, for all engineers who are interested in quantitative trading to create their own trading strategies, both easily and effectively.
In addition, the created good algorithms can be sold or shared through a user-friendly algorithm store, all within the reach of individual investors. We call that democratization of trading.
When will the beta version launch? What are the goals for your beta version besides the funding motive?
We just launched the beta version in April where users can create, backtest, save the algorithm related to Japan and China Stock market. The funding motive is to speed up our development and strengthen the UI/UX area of our product.
You have considered Quantopian in U.S as a potential competitor, so is Smart Trade targeting the U.S market besides the main Japanese market? And why is it U.S but not other markets?
Currently, we have considered Japan and China as the first target markets, although we are also very interested in the other markets within the Asian region. Compared to USA, the financial industry in Asia still has large room for growth and we believe quantitative trading will become much more popular in this region. We see this as an opportunity for us.
How do you feel about the role of Startupbootcamp Fintech? Give us 3 lessons you learned from being a part of Startupbootcamp Fintech until now.
We think Startupbootcamp Fintech is a very powerful mentor and partner for startups. We are very lucky to be part of all of this.
Firstly, through Startupbootcamp, we get to see and clarify potential problems and challenges from different perspectives through mentoring sessions and conversations with its partners. Those are very helpful for us to correct the product and make good preparations for upcoming challenges.
The Startupbootcamp team also provided us with their professional advice and knowledge which has directly helped us in our business. Also, Startupbootcamp has introduced us to the necessary networks and resources, which would have been impossible for a startup to reach by itself. We learned a lot from the team and the most important thing is that they have enabled us to think more in depth, from a user’s perspective. Not only that, it has also allowed us to understand the need to keep thinking globally despite the target market or language.
Overall, we really appreciate the opportunity to be part of Startupbootcamp FinTech.
What are your expectations from Startupbootcamp FinTech Program by the end of the journey?
We would like to improve and develop our product further and also find the best-detailed way to shift it to a real business through the program. For that, we also would like to develop and maintain good relationships with the mentors, potential partners and also investors we have met through Startupbootcamp.