Capital markets infrastructure startup smallcase on Monday said it has raised $14 million as part of its Series B financing round led by DSP Group along with existing investors Sequoia Capital India, Blume Ventures, Beenext and WEH Ventures.
This round also saw participation from Arkam Ventures (previously Unitary Helion), Utpal Sheth, CEO at Rare Enterprises, which is owned by billionaire investor, Rakesh Jhunjhunwala and Kunal Shah, founder, CRED.
According to the company, this funding will be used to enhance the platform’s infrastructure stack, add more investment products and partners, as well as to expand its technology and product teams.
The five-year-old startup works with capital market participants (including brokerages, advisors and digital wealth platforms) to offer simple and transparent investment products called ‘smallcases’.
smallcases are model portfolios of stocks and exchange-traded funds (ETFs) that are created and managed by registered individuals and entities.
“Our mission is to develop simple & transparent investment products for the Indian retail investor and in the last few years, we have built a very unique brand and have some of India’s most respected financial institutions as strategic partners to further this goal” said Vasanth Kamath, founder and CEO, smallcase.
At present, the smallcase platform is integrated with Zerodha, HDFC Securities, Kotak Securities, 5Paisa, and AxisDirect to help offer stock and ETF smallcases to their client base.
Through integrations with brokerage firms alone, the startup’s investor base has grown to more than 1.5 million investors, over the last two years, with over Rs. 5,000 crores being transacted through its product.
“smallcase is targeting 40 million direct equity investors in India with its innovative, easy to understand, transparent and digital first products. Their rapid growth, exceptional investor retention, unique marquee partnerships across the ecosystem have been key reasons why the Sequoia India team has doubled down on their partnership with the company”, said Harshjit Sethi, Principal, Sequoia Capital India LLP.
smallcase also launched its ‘publisher platform’ last year, a business-in-a-box solution to democratise investment product manufacturing. In addition to investment management, this solution offers all functionalities including risk profiling, fee collection, invoicing, communications to registered research professionals and advisors to start, manage and grow their business.
Currently, more than 50 advisors and breakaway managers use the publisher platform.
Earlier this year, smallcase also launched its gateway offering – a suite of application programming interface (APIs) to enable any app to provide stock, ETFs. Until now, 11 apps including Moneycontrol, SBI Mutual Fund, Nippon AMC, Kuvera have integrated the smallcase ‘Gateway’ to offer stock and ETF transactions to customers.
“It’s been wonderful watching the growth of the team, from an idea to delivering the original promise of simplicity at scale. It allows for millions of new and existing investors to partake in equity markets more thoughtfully.” Karthik Reddy, managing partner, Blume Ventures
Apart from brokerage integrations and its B2B offering, smallcase also directly engages with retail investors through the smallcase app that enables users to invest and track their investments across different brokerages.
“We spent the first 3 years of our journey building the core platform and transaction pipes with our partners and are now developing an ecosystem around smallcases. In the next 18 months, we will be growing the smallcases ecosystem with more products, manufacturers and distribution partners,” said Kamath.
