Investment Tech Startup Smallcase Raises $8 Mn From Sequoia, Others

Investment tech startup Smallcase has raised $8 Mn Series A funding led by Sequoia India, with participation from existing investors — Blume Ventures, Straddle Capital, Beenext Pte Ltd, WEH Ventures and DSP Adiko.

Launched in 2016 by Vasanth Kamath, Rohan Gupta and Anugrah Shrivastava, the Bengaluru-based startup provides users with a professionally built basket of stocks called ‘smallcases’, allowing them to invest in portfolios of broker-partner stocks and exchange-traded funds (ETFs) using their personal existing demat accounts.

The startup works with stockbrokers — HDFC Securities, Zerodha, AxisDirect, Edelweiss and 5Paisa — who are into stock trading.

“We bring together brokers, research analyst as well as advisors to sell this new instrument called smallcases. We give a portfolio exposure to stock traders with a cost lower than others with complete transparency and options to tweak,” Kamath told Inc42.

The startup claims that more than 2.5 lakh investors have already made transaction worth over INR 2K Cr ($282.6 Mn) using smallcases.

Commenting on startup’s plan on utilising the funds, Kamath said, “In order to widen the reach and get more people investing on smallcases, we are taking the platform to all brokers. Here, we give the brokers a platform where their clients can also invest in smallcases.”

“Also, similar to other platforms that sell mutual funds, we are also going provide an infrastructure to enable selling of stocks in ETF via small cases,” he added.

The startup charges a flat fee of INR 100 each whenever there is a smallcase transaction happening on the broker’s platform. As of FY 2017, smallcase generated a revenue of around INR 17 Lakh ($24K). In 2018, it scaled a revenue of INR 1.38 Cr ($195K), claimed the founder.

“Sequoia India is excited to partner early with them, working with smallcase as it pioneers a new way to invest in equity markets, and grows rapidly on the back of its partnerships with top brokerages in India,” Smallcase released a statement, citing Sequoia Capital India principal advisors Harshjit Sethi.

Further, the 54-member team at Smallcase is planning to tie up with at least 10 brokerages in India, aimed at scaling up its user base to over 10 lakh by FY 2019.

Its existing investor Blume Ventures managing partner Karthik Reddy said, “By creating simplicity and transparency for direct investors, investment advisors and brokerage houses to offer low-cost equity investing, they’ve quietly upscaled their portfolio in a short span of time. We hope to see them at the forefront of the equity market development.”