How Smallcase is bringing the capital markets to the masses

Vasanth Kamath, co-founder and CEO, Smallcase

It has never been easier for the aam aadmi to invest in the Indian stock markets and aim for better returns than fixed deposits. Wealth management is another dimension on which the fintech landscape is expanding.

As an example of fintech companies that are innovating here, Smallcase Technologies exemplifies how sophisticated know-how of both the markets and software can be combined to make such investments easy. 

Smallcase’s curated baskets of stocks and exchange traded funds (ETF) have made the choices user friendly—pick the ones that suit your goals and risk appetite. For the more involved investor, Smallcase also offers a growing set of tools for analytics and portfolio management.

The company’s user base grew by 30 percent in FY24, says Vasanth Kamath, co-founder and CEO, cumulatively crossing the 10-million-mark by number of users and $9.3 billion in total transaction value since Smallcase started in 2016. In the last 24 months, customers who’ve actively used Smallcase on a monthly basis have tripled to about 6,00,000, he says.

Existing users entrusted it with a larger share of their portfolio during last year, leading to net inflows rising 50 percent, he says. The company is ready to offer a more comprehensive experience. What started with stocks has expanded to include ETFs, REITs, mutual funds and fixed-income products—all packaged within ‘smallcases’.

“Now they (investors) can consolidate their entire portfolio, no longer restricted to ‘smallcases’, they can import their stocks, ETFs, mutual fund holdings, track it on the Smallcase platform and app, get some actionable insights,” Kamath says. “And we also launched secured loans, in a completely digital format.”

Smallcase also has an asset management joint venture with online broker Zerodha.

Smallcase is an attractive proposition as a tech platform connecting such businesses with the growing number of retail investors interested in the capital markets. The partners benefit because the platform offers an avenue to expand the products they can offer to their end customers, in the case of brokers, and a chance to “productise their research, so they can focus on what they do best”, in the case of analysts and advisors, Kamath says.

Two pieces of tech make Smallcase stand out: One, a publisher platform that automates a clutch of functions and processes for the partners such as the research analysts and advisors. And second, the ‘Smallcase gateway’ which is a bit like a payment gateway for non-broking partners to transact with the brokers of their choice.

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Kamath expects that Smallcase can double the wallet share of its users from an average of 25 percent of their total portfolios today. The core operation is not far from breakeven, Kamath says. He adds: “We want to be profitable for the entire FY25.”