Investment platform Smallcase expects to turn profitable in the current year as it eyes more growth in the amount transacted on the platform, its Founder and Chief Executive Officer, Vasanth Kamath told businessline.
Launched in July 2016, a smallcase is a basket or portfolio of stocks or exchange-traded funds (ETFs) representing an objective, theme, or strategy.
“This is the year where we want to turn profitable as revenue has grown 80–100 per cent, while costs are growing at 15–20 per cent,” said Kamath.
Surge in user base
The platform’s cumulative transaction value surged to ₹60,000 crore in 2024, surging from ₹2,500 crore in 2020. The user base grew from 1.5 lakh to 1.5 crore during the same period, highlighting its increasing adoption among retail and institutional investors.
Growth strategies
Talking about the growth strategies, Kamath noted that the company is looking to onboard research analysts (RAs) and registered independent advisers (RIAs). “Today, 120 creators on our platform, but the growing depth of the market and new areas like renewable energy and digital companies require more specialised analysts and wealth managers,” Kamath explained.
An RA provides investment advice or recommendations on securities, commodities, or currencies, while RIAs provide investment advisory services to clients, including individuals and institutions based on a defined fee structure.
Wealth managers, particularly through collaborations with major banks such as ICICI and HDFC, are instrumental in broadening Smallcase’s reach. These managers curate tailored smallcases for clients, enabling personalised investment strategies for high-net-worth individuals while also offering ready-made portfolios for the wider retail market, he said.
Smallcase’s revenue model revolves around creators, brokers, and wealth platforms. “Around 80 per cent of our revenue comes from creators, 15 per cent from brokers, and 5 per cent from wealth platforms,” Kamath said.
Recently, smallcase tied up with Zerodha (one of India’s largest brokerage houses) to launch Zerodha Fund House.
“Our AMC was launched in late November 2023 and has seen a good start, managing ₹4,200 crore in assets within the first year,” Kamath said.
The AMC currently manages six funds, all focused on passive strategies like index funds and ETFs. The firm plans to expand this catalogue to 20–25 core offerings by mid-2025, including hybrid index funds, which will launch after regulatory approvals.
Smallcase is rolling out a slew of new products. The company is set to launch mutual fund smallcases within this quarter, a feature designed to simplify fund selection. Additionally, fixed-income options, global equities, and hybrid index funds are in the pipeline. “Tomorrow, if pension funds or other relevant categories emerge, we aim to participate by building products or enabling their creation,” Kamath noted.