Sunday, 2024 May 26

Amazon places its bet on India’s wealth tech space with investment in Smallcase

After opening its platform for digital payments and entering the insurance tech sector by partnering with insurtech startup Acko, e-commerce giant Amazon is now getting into the wealth tech space in India.

Bengaluru-based wealth management startup Smallcase has raised USD 40 million in its Series C round of funding led by Faering Capital with participation from new investors, Amazon and Premji Invest. Existing investors such as Sequoia Capital, Blume Ventures, Beenext, DSP Group, Arkam Ventures, WEH Ventures, and HDFC Bank also invested in the company.

Started in 2016 by Vasanth Kamath, Smallcase is catered towards helping millennials and Gen Z invest in the stock market. With the help of in-house investment professionals, it groups the stocks of companies from a specific sector into a bundle, which it calls smallcases, for users who want to invest in sector-specific companies without having to track each company’s financial health. A few examples of smallcases include pharma companies and electric mobility, among others.

“We have created a new, fast-growing category of investment products by developing an ecosystem of over 250 businesses in the capital markets space including India’s largest and fastest-growing brokerages, advisors, investment managers, and digital wealth platforms,” Kamath, founder of Smallcase, wrote in a blog post.

The company said over 3 million users trade on the platform and facilitate transactions worth USD 2.5 billion a year.

“It has been both humbling and inspiring to see smallcases become the primary gateway to stocks and ETFs for millions of new investors,” Kamath wrote.

Prior to its investment in Smallcase, Amazon has backed Indian startups such as bus-hailing startup Shuttl, online invoice discounting company M1Xchange, and direct-to-consumer beauty brand MyGlamm. In April this year, Amazon announced a USD 250 million venture fund to invest in Indian startups.

Last year, it partnered with insurtech company Acko to enter the insurance sector. As Amazon makes its presence in the country’s fintech space more prominent, it’s making the Reserve Bank of India (RBI) jittery. In its most recent report, RBI warned of the challenges pertaining to cybersecurity, data privacy, and the potential monopolistic business practices it could pose for the country.


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