Amazon.com Inc. has made its first investment in India’s wealth management sector, contributing $40 million to a round led by fintech startup Smallcase Technologies Pvt.
The round was led by Faering Capital Pvt and was joined by another new investor PremjiInvest, the private investment office of technology billionaire Azim Premji, according to the Bangalore-based startup.
Existing backers such as Sequoia Capital India and Blume Ventures also contributed, bringing the firm’s total capital raised to more than $60 million.
Smallcase was founded in 2015 by three friends from the premier Indian Institute of Technology in Kharagpur, Vasanth Kamath, Anugrah Shrivastava, and Rohan Gupta. It is riding an unprecedented pandemic-fueled retail investor boom in India’s equity markets, and its user base has more than doubled in the last year to more than 3 million users.
Smallcase enhances digital access to capital markets by providing weighted portfolios of stocks and exchange-traded funds managed by licensed professionals in-house, as well as access to independent investment managers, brokerages, and wealth platforms. It has partnerships with a dozen brokerages across the country and distributes its products through broker partners, wealth advisers, and offline agents.
Kamath, the chief executive officer stated in a video interview, “A new set of younger, high risk-taking investors are participating in the capital markets and they want complete transparency. “We build simpler, low-cost investment products, each reflecting a theme, a strategy or objective,” he added.
Smallcase’s order volume has more than doubled in the last year, according to Kamath. It employs 200 people, nearly two-thirds of whom work in technology and product engineering.
The funds will be used to expand the company’s investment products in asset classes such as mutual funds, global equities, and bonds. The startup intends to expand its technology platform and expand its distribution network.
Amazon’s investment in Smallcase ushers in a new era of wealth management for the company. The e-commerce behemoth has previously invested in other Indian fintech startups, including insurance company Acko General Insurance Ltd. and credit provider Capital Float.