InvestAI: Brazilian startup builds a bot to dig for fixed-income investments in the secondary market
Image: InvestAI/Website

InvestAI: Brazilian startup builds a bot to dig for fixed-income investments in the secondary market

InvestAI has developed a system that finds and buys fixed income investments with better rates; in one year, the platform has already invested more than BRL 60 million in the secondary market

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“Want to invest without taking major risks? Go for fixed-income security.” Raise your hand, first-time investor or not, who has never heard this advice. For many years, fixed-income investments have been considered the ideal class of assets and securities for those who are not very fond of great risks but doesn’t want to keep their savings tied up. Although its profitability may vary according to the bond type, the term, the issuer, and the fixed interest or dividends, fixed-income is, in general, a low-risk investment, but also a relatively low-return investment. At least until it reaches the secondary market.

The secondary market is where investors buy and sell securities directly, without the involvement of the issuers – in the case of fixed-income bonds, banks, companies, and the government. Thus, the secondary market makes it possible to redeem investments before maturity while maintaining liquidity; in the primary market, the investment would only have liquidity at maturity. For those who sell a fixed income product in the secondary market, the advantage is to access the resources before the maturity of the asset. For those who buy, the advantage is to acquire a low-risk investment with better rates than those on the primary market.

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The fixed-income products available in the secondary market are more scarce than the variable-income securities and, normally, they run out quickly.

“These are super hot investments on the brokerage platforms because they pay higher rates. Some fixed-income investments are not available for more than a few seconds, you see it and by the time you click on it, it has already been traded by another investor. We saw an opportunity there: to create an algorithm, a bot, that identifies the best fixed-income investments and then invests in them”, says Lucas Seixas, when explaining InvestAI‘s thesis.

InvestAI’s co-founders Lucas Seixas and Rafael Correia. Photo: Courtesy

Founded in September 2020 by Seixas and Rafael Correia, InvestAI developed an algorithm that searches for fixed-income investments in the secondary market. The investor needs only to access the startup‘s platform, enter the amount he wants to invest, the interest rate he is looking for, and the investment term. From there, InvestAI finds the ideal investment and makes the application within the platforms of qualified brokerage firms (currently, XP, BTG, and Genial).

The investor’s funds do not run through the startup‘s system; the money to be invested is kept in the broker’s account. “The client has the security that his money remains in his brokerage firm. InvestAI accesses his brokerage account and monitors the investment shelf. As soon as it finds the fixed income security within the parameters defined by the investor, it executes the purchase,” explains Seixas.

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According to Seixas, at first, the InvestAI algorithm “was for personal use, for family, some friends who invested,” but the system proved so efficient that soon other clients began to seek the duo to use the platform. “That’s when we understood that we had a real business in our hands: the thesis validated, the product developed, organic and sustainable growth,” he says.

The startup earns a commission on the return on investments made through the platform. “We find the best investment, with the best yield, and this was the way we found to monetize the business. We don’t get paid on the amount the client invests, only on what the investment yields”, he explains.

With just over a year, InvestAI already has more than 500 clients and has handled more than BRL 60 million in investments in the secondary market.

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A few days ago, the startup tapped its first funding round. TC (Traders Club), a platform that brings together financial education, data analysis, and market intelligence for Latin American investors, injected BRL 3.1 million, taking a 20% stake in the company. According to TC, InvestAI’s operations will soon be carried out within the TC platform, which has a community of over 560,000 registered members.

With the funds recently raised, InvestAI intends to invest in the platform’s technology and in customer acquisition, since the growth of the client base has so far been organic. The startup is considering starting to operate in the secondary market for variable-income security and crypto.