HDFC Bank invests in fintech startup smallcase

HDFC Bank, the country’s largest private lender, has invested an undisclosed amount in investment startup smallcase, as part of its recently-concluded $14 million Series B funding round.

Existing investors DSP Group, Sequoia Capital India and Blume Ventures also participated in the round.

Founded in 2015 by Vasanth Kamath, Rohan Gupta and Anugrah Shrivastava, "smallcases" are model portfolios of stocks and exchange-traded funds (ETFs) that are created and managed by registered individuals and entities and accessible to retail investors.

The smallcase platform is integrated with India’s largest brokers, including Zerodha, HDFC Securities, Kotak Securities, 5Paisa and AxisDirect, to offer "smallcases" to their clients.

CEO Vasanth Kamath estimates there are about 2 million users and about Rs 5,000 crore has been transacted in smallcases.

“Partnering with fintech firms like smallcase has always been a part of our core strategy of providing a differentiated experience to our customers across platforms and products. This investment by HDFC Bank further strengthens our partnership with smallcase for various future initiatives to deliver best-in-class customer experiences,” said Nandkishore Purohit, Head - Digital Business, HDFC Securities in a statement

Earlier this year, smallcase launched its gateway offering, which helps any app to provide stock, ETF & smallcase transactions in a native, secure and compliant manner. Eleven apps and platforms, including Moneycontrol, SBI Mutual Fund, Nippon AMC, Kuvera, have integrated the smallcase gateway to power stock & ETF transactions.

smallcase’s funding is also led by a spurt in usage of investment and wealth management apps during the coronavirus lockdown. The comfort of online adoption and falling stocks in March and April saw more retail investors transact on these platforms and these startups such as smallcase, Zerodha, Upstox and Groww grew faster than expected, Moneycontrol wrote in May.

Disclosure: Moneycontrol has partnered with smallcase Technologies to invest directly from its platform.