Wealth and asset management startup Neo bags $35 million funding from Peak XV

Founding Team at Neo Group

Wealth and asset management startup Neo has raised $35 million (around Rs 300 crore) in its latest funding round from Peak XV Partners (formerly Sequoia India) to expand its existing business offerings.

The firm is looking to expand its team in India and enter more markets including the tier-II and tier-III cities. Neo has around 350 employees and is looking to take the total number of employees to around 500 in the next 12-18 months.

“The quality of talent we can attract, retain and build is very important for a business like ours. We do hope to become a lot more aggressive in the next 12-18 months within the wealth and asset management space…I expect more offices of Neo in at least 12-15 cities by the end of 18 months,” said Nithin Jain, founder and managing director of Neo Group in an interaction with Moneycontrol. 

Founded in 2021 by Jain who was the former CEO of wealth and asset management, at Edelweiss Financial Services, roped in Macquarie Group ex-country head Varun Bajpai and Edelweiss Asset Management ex-CEO Hemant Daga to Neo Group.

Neo provides financial advisory and engagement to its clients and is currently building a one-stop platform to enable transacting and consolidated portfolio reporting across products, asset classes and instruments. It mainly caters to HNIs, UHNIs and multi-family offices.

“As we scale we are also looking to take institutional capital both domestically and globally. Most of the institutional investors expect startups to have skin in the game and thus we also use the capital to add a meaningful contribution to our funds,” Jain told Moneycontrol.

According to the firm, it has clocked over $3 billion (Rs 25,000 crore) of Assets Under Advice, including $360 million (Rs 3,000 crore) of Assets Under Management (AUM).

“We are close to Rs 3000 in AUM and hopefully we should touch Rs 3,500 to Rs 4,000 within the next one month…AUA plus AUM in the next 18-24 months we expect to touch Rs 1 lakh crore. I know it is ambitious but we are aiming for this,” Jain said.

Neo is also seeking a Non-Banking Financial Company (NBFC) license from the Reserve Bank of India to enter into lending to its existing customers via loans against mutual funds or bonds for a short-term basis.

“We are seeking an NBFC license from the RBI and it will largely used within our own wealth plans…Our existing clients are all looking for funds for various use cases like working capital and more and generally people don’t want to keep on redeeming their investments,” Jain added.

Neo partly competes with firms like Vivitri Capital and Jio Financial Services' new Asset Management platform.

The new funding brings the total capital raised by Neo to around Rs 700 crores. In earlier funding rounds, the company had raised nearly Rs 400 crores of equity from undisclosed private investors.

“Wealth management in India, a $2.8 trillion industry, is a fertile market growing at a CAGR of 15-20 percent year-on-year. Nitin Jain and his team have decades of experience in the industry and are looking to build an institution of choice and trust for wealthy customers,” said Sakshi Chopra, MD, Peak XV.