Wealthtech startup Fisdom to foray into asset management space

Fisdom co-founder Subramanya SV

Wealth management startup Fisdom plans to enter the asset management business and establish an AMC within the next 12 months, with a Portfolio Management Service (PMS) license, co-founder Subramanya SV told Moneycontrol.

"We presently are in distribution and advisory services with our wealth management, stock broking and tax filing services. Within the next 12 months we will be looking to set up an Asset Management Company (AMC) with PMS license," said Subramanya SV at a roundtable presentation on launching the customer service initiative 'voice of the customer' in Bengaluru.

The startup is looking to launch a PMS license initially for its High Net Worth Individual (HNI) customers, which will be accessible through its Fisdom Private Wealth platform.

"We will not be entering the mutual funds business for now the process to obtain a license there is a little difficult but maybe in 5-6 years we will explore this space," Subramanya said.

Subramanya stated that Fisdom will be launching its PMS investments through a separate entity named Fisdom Asset Management Company.

Stock brokerage Zerodha recently announced the formation of a joint venture (JV) with wealth management company Smallcase to launch an asset management company (AMC) that will focus on passive mutual funds.

Zerodha Broking Limited received in-principle approval from the Securities and Exchange Board of India (SEBI) in September 2021 to set up an AMC.

Fisdom will compete with companies such as Nippon India Mutual Fund, which provides PMS services.

Mutual Fund investments require a minimum investment of Rs 500 per person, while for PMS investments, the minimum investment range starts from Rs 50 lakh.

Founded in 2015 by Anand Dalmia and Subramanya SV, the company is backed by investors like Quona Capital, Saama Capital and merchant payment platform PayU.

Fisdom has raised a total of $38 million, with its most recent funding being a $14 million infusion by PayU in 2022.

In 2021, Fisdom entered the online broking business to compete with existing players such as Zerodha, Groww, and Upstox. In the same year, the PayU-backed firm acquired Jaipur-based online income tax return filing platform Tax2win for an undisclosed amount.

The startup presently has around 1.3 million customers and Rs 5,000 crore of Assets Under Management, Subramanya SV said.

IPO plans and timeline

The company is planning to launch an Initial Public Offering (IPO) within the next 3 to 4 years.

"Public markets are harsh and unless one has profitability and predictability it is very difficult to succeed. That is what we will be focusing on," Subramanya told Moneycontrol.

The company aims to achieve profitability within the next 12 months.

"The wealth management business is already profitable and the stock broking business will turn profitable in the next 9 months," Subramanya said.

The firm also launched a Customer Advisory Board which will handpick people/users, along with members of its board.

"The Customer Advisory Board will have 30-50 people in it with handpicked invite-only members in it," Subramanya said.

The Board aims to improve and develop new products through this board.