India’s Largest Lender HDFC Bank Invests in Fintech Firm Smallcase, which lets Users Invest in Basket of Stocks

Smallcase, a Fintech firm that allows people to invest in a basket of stocks, has acquired an undisclosed amount of capital (as part of its Series B investment round) from HDFC Bank, an Indian banking and financial services company based in Mumbai. HDFC Bank (NSE: HDFCBANK) is notably India’s largest lender and the largest bank in the country in terms of market capitalization (as of March 2020).

Existing investors DSP Group, Sequoia Capital and Blume Ventures also took part in Smallcase’s round. Arkam Ventures and several angel investors made contributions as well.

Established in 2015 by Vasanth Kamath, Rohan Gupta and Anugrah Shrivastava, Smallcase lets people make investments in a portfolio of stocks or exchange-traded funds (ETFs). Additionally, there’s an option to create more customized investment portfolios. The portfolios may be sectoral (investing in several different industries), thematic (like impact investing or environmentally-friendly firms), large-cap stocks-focused or investments that provide exposure to different assets through ETFs.

Smita Bhagat, Head – Government and Institutional Business, E-commerce and Startups Units, HDFC Bank, stated that with a “unique” model, Smallcase is set to create a niche in India’s capital markets and could play a role in further expanding the market.

Nandkishore Purohit, Head – Digital Business, HDFC Securities, said that teaming up with Fintechs such as Smallcase has “always been a part of our core strategy of providing a differentiated experience to our customers across platforms and products.” Purohit also mentioned that “this investment by HDFC Bank further strengthens our partnership with Smallcase for various future initiatives to deliver best-in-class customer experiences.”

The Bengaluru-headquartered Fintech firm secured $14 million in funding as part of its Series B round which was led by DSP Group in September 2020. As first reported by Entrepreneur, Smallcase will also be working with brokerages such as HDFC Securities, Kotak Securities, Axis Securities and Zerodha in order to offer various investment options to local traders and investors.

The Smallcase team states:

“We’re on a mission to change how India invests. Smallcase is a Fintech company building a trusted financial ecosystem together with investors, advisors, brokers and other market participants. From individual investors to big AMCs, our products are used every day across India’s capital markets.”

Smallcase has introduced its gateway offering, which allows various apps to offer stock, ETF and Smallcase transactions in a secure and compliant manner. There are reportedly eleven apps and platforms which have added the Smallcase gateway to facilitate stock and ETF transactions. They include Moneycontrol, SBI Mutual Fund, Nippon AMC, and Kuvera.

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