Silicon Valley and Mumbai-based investment tech platform Vested Finance has raised $3.6 Mn in its seed funding round from US-based venture capital firms Moving Capital, Ovo Fund and TenOneTen Ventures as well as Inflection Point Ventures and Venture Catalysts in India.
The platform enables Indian retail investors to invest in the US stock market without the need to go through several layers of approvals. The company will use the funds raised to accelerate product development and hire talent across the US and India.
Founded in 2019, the company claims to have seen rapid growth from 2020, where fund deposits have grown 26x over the last twelve months, along with a 5x increase in US brokerage accounts opened through the platform. Vested says it processed more than $100 Mn in trades in 2020, and more than half of the investors using Vested are investing in the US market for the first time ever.
“Individuals in India have been contributing to the top and bottom line of international companies for decades, but have never had the chance to create wealth by investing in them,” said Viram Shah, CEO and cofounder.
Vested’s zero-commission online platform requires no minimum balance and allows investors to invest in US-based stocks just like they would invest through domestic stockbroking platforms such as Zerodha or Upstox. Investors can choose individual stocks or ETFs, or select from a variety of ‘Vests’ or curated portfolios constructed with various goals, themes, and risk levels in mind.
To facilitate Indian investors to invest in U.S. markets, Vested has partnered with more than 25 brokers, fintech, and wealth management firms in India, including Axis Securities, Kuvera, Angel Broking and 5Paisa. Vested has also partnered with global digital trading technology platform DriveWealth to power its offerings.
Vested is a recent graduate of the 2020 Techstars and Western Union accelerator in Denver, where the 2020 program thesis focused on access to better financial tools and services that will create a more equitable and inclusive financial system.
The startup competes with platforms like online discount broker 5paisa, INDMoney, Stockal, Winvest and other Indian brokerages which offer similar services to invest in US stocks. Most of the investment tech startups claim zero or minimum commission and transaction charges to offer these services.
Recently, Paytm’s wealth management platform Paytm Money announced that it is going to enable Indian retail investors with access to top tech stocks from the US in association with Mirae Asset’s NYSE FANG+ ETF. Indian investors can invest in the US stock market by opening overseas accounts with Indian brokerages, foreign brokerages or through mutual funds that are invested in such stocks. Investment tech platforms usually enable these investments through partnerships with foreign brokerages. Recently, Stockal set itself $1 billion assets under management (AUM) as its next big target, even as the firm expands its presence to Southeast Asia and Eastern Europe following its recent Series A funding.
According to the Inc42 Plus ‘Investment Tech In India, Rise Of Retail Investment, Report 2021’ India is now home to more than 400 investment tech startups and the country’s investment tech market is set to reach $14.3 Bn by 2025 growing at a CAGR of 22.4%. Indian investment tech startups have raised a total of $379.2 Mn between 2015-2020. Last month, India got its second investment tech unicorn Groww with $83 Mn series D funding from Tiger Global. Last year, Zerodha was the first Indian investment tech platform to attain unicorn status.
Gil Elbaz, partner, TenOneTen Ventures said, “Vested is bringing this cross-border investment opportunity to India and beyond, allowing local investors to diversify globally by spreading out their risk, and we’re excited about the possibilities Vested will bring to individuals in India, Southeast Asia and around the globe.”