smallcase Bags $50 Mn To Expand Its Investment Product Offerings

Investment tech startup Smallcase has secured $50 Mn (INR 428.1 Cr) in a Series D funding round led by Elev8 Venture Partners.

The round also saw participation from State Street Global Advisors, Niveshaay AIF, Faering Capital and Arkam Ventures.

The startup plans to deploy the fresh capital to expand its investment product offerings across asset classes, like mutual funds and fixed income, while also eyeing to strengthen its partnerships with financial institutions to enable wider integration and adoption.

Apart from this, the proceeds will be deployed to boost its technology and data analytics capabilities.

Founded by Vasanth Kamath, Rohan Gupta and Anugrah Shrivastava in 2016, Bengaluru-based smallcase 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 counts BEENEXT, DSP Asset Management Firm, Milestone Trusteeship Services and QED Innovation Labs among its other investors.

smallcase competes with brands such as Univest, Fisdom, Dhan and others in the investment space.

On the financial front, smallcase’s revenue from operations jumped almost 173% to INR 56.34 Cr in FY24 against INR 20.64 Cr, in the previous fiscal year. Meanwhile, its net loss widened to INR 163.96 Cr in the year under review, up nearly 26% from INR 130.26 Cr in FY23, weighed down by higher costs.

Why Investment Tech Startups Are Gaining Investor Traction

The expansion of stock markets and wealth generation in India is opening up new opportunities for investment tech and wealthtech startups. Unlike the traditional wealth management services offered by banks, wealthtech startups leverage data analytics and latest technology to offer personalised investment strategies at a fraction of cost.

There are two sets of wealthtech startups; those looking at the premium wealth management opportunity such as Angel One Wealth, Neo Group and Centricity and those building fixed income products and platforms for alternative asset classes such as Grip Invest and Stable Money.

This shift is driving many investors to cash in on investment tech and wealthtech startups. For instance, in December last year, wealthtech startup Univest secured $10 Mn as a part of its Series A funding round led by Bertelsmann India Investments (BII). Following that in February, Univest entered the crowded discount broking space with the launch of ‘Univest Broking’.

Earlier this month, investment tech unicorn Groww was reportedly in talks to acquire wealthtech startup Fisdom as part of its plans to enter the wealth management space to expand its offerings.

The Indian investment tech market is expected to reach a size of $14 Bn this year, as per Inc42’s report.