Stock-broking platform Punch has secured $7 million in seed funding. Stellaris Venture Partners, Susquehanna Asia VC, Prime Venture Partners, and Innoven Capital led the round. Angel investors such as Cred founder Kunal Shah, Ultrahuman cofounder Vatsal Singhal, and Nazara Technologies founder Nitish Mittersain also participated.
The startup will use the funds mainly for research and development (R&D) to improve user experience and marketing efforts.
“Over the next year, a chunk of the funds we have raised will be spent on innovating our products, understanding the problems by seeing what the regulator wants and what the customer wants. We will see how we can inculcate responsible trading without really giving education to customers,” said Amit Dhakad, cofounder and CEO of Punch.
Founded in 2022 by Dhakad, Hiral Jain, Arshad Fahoum, and Ajit Dandekar, Punch is a trading platform from Market Pulse Securities, a Sebi-registered broker. The platform offers index, stock options trading, and direct stock trading.
Dhakad noted that 60-70% of Punch’s users are young, part-time traders with less than a year of experience. Although the company focuses on options trading now, it plans to add cash trading next month.
Punch completed its beta testing phase over the past 18 months and has about 18,000 trading accounts.
The Securities and Exchange Board of India (Sebi) has increased scrutiny on derivative trading, including futures and options (F&O). On July 30, Sebi released a consultation paper proposing measures to limit high-risk derivative trading. These measures include raising the minimum contract size for F&O to Rs 20 lakh and imposing limits on weekly options contracts.
Despite these new regulations, Punch observes that young traders continue to engage in derivative trading, often underestimating the risks.
