Faering, Amazon, Premji Invest, Sequoia, others pour money into WealthTech firm Smallcase

Capital market-focused FinTech company Smallcase raised $40m in funding, led by Faering Capital as well as new investors Amazon Smbhav Venture Fund and Premji Invest.

The Series C round also saw participation from existing investors, including Sequoia Capital India, Blume Ventures, Beenext, DSP Group, Arkam Ventures, WEH Ventures, HDFC Bank Group and Rare Enterprises CEO Utpal Sheth. The round brings the total capital raised by Smallcase to over $60m. The fresh fundraise has come within a year for the Bengaluru-based startup which picked up a $12m Series B in September last year.

With the close of the transaction, Sameer Shroff, co-founder and managing director at Faering Capital, will join its board.

Smallcase will utilise the fresh proceeds to expand its investment products, grow its technology platform and further build its distribution network.

The five-year-old startup founded by Vasanth Kamath, Anugrah Shrivastava, and Rohan Gupta, lets retail investors choose from a number of themed portfolios having stocks and exchange-traded funds (EFTs) in a proportion that creates the highest return on investment.

Smallcase claims that over three million users transact $2.5bn worth of stocks annually and works with around a dozen broker partners including AxisDirect, Zerodha, HDFC Securities, 5Paisa, and Edelweiss.

Kamath said, “The last 2 years have seen remarkable interest from Indian retail investors in the equity markets, and we are inspired to see smallcase become the primary gateway to stocks and ETFs for millions of new investors.”

The company is focused on expanding its offerings to cement its position as the premier portfolio investing layer across asset classes for the retail investor, he added.

India’s retail investment segment has seen considerable traction over the pandemic as low bank deposit rates and abundance of liquidity has helped indices gain rapidly even as fintech firms such as Zerodha, Groww, Upstox, and Paytm Money have witnessed significant growth on their respective platforms.

The investment also marks Amazon’s entry into the wealth management space in India. Over the past three years, it has increased its investments in startups in the country. The e-commerce giant, which has backed bus aggregator Shuttl, insurance startup Acko, fintech lender Capital Float and digital payments startup ToneTag in 2018, has also invested in D2C beauty brand MyGlamm, and acquired retail tech startup Perpule in 2021.

In April, it announced $250m worth Amazon Venture Fund for Indian startups and made its first investment in Gurugram-based MSME-focused fintech startup M1xchange. An Amazon spokesperson said the company invested in Smallcase through its $250m venture fund. “As part of this Fund, we are excited to partner with smallcase in their journey to offer innovative consumer investment products. By increasing product selection and convenience, this will provide an additional channel for consumers to participate in the equity markets,” the spokesperson added.

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