Transforming investment: Interview with Vasanth Kamath, CEO of Smallcase

By Puja Sharma

Vasanth Kamath, an IIT Kharagpur alumni, with a drive to transform and disrupt the investing products space, and provide new investors with simple, low-cost & transparent investment products.

An IIT Kharagpur graduate in MS Economics, Vasanth began his entrepreneurial journey with his college friends Anugrah, and Rohan with the aspirations of creating a modern investment products platform aimed primarily at millennials. Since then, Smallcase has raised a total of $62 million in funding over three rounds.

The firm was founded in July 2016 by Vasanth Kamath, Anugrah Shrivastava, and Rohan Gupta, all IIT Kharagpur alumni. Smallcase is a FinTech company building a trusted financial ecosystem with advisors, brokers, and other market participants for the investor.

With a user base of over 3.8 million and transactions worth over INR 16,000 crore on the platform, Smallcase has key backers like Sequoia Capital, Blume Ventures, HDFC Bank, Amazon, and several others.

The company has partnered with leading brokerages like Zerodha, Groww, Kotak Securities, HDFC Securities, 5paisa, Edelweiss, Axis Securities, and IIFL Securities – and together, they are building an ecosystem of simplified stock portfolios, which an investor can transact using any of the existing partner booking sites.

Smallcase currently has a team of 250+ across product, engineering, business, and growth functions, and an ecosystem of 300+ most trusted financial institutions as partners, transacting $2 billion annually.  As a millennial-focused direct indexing platform, the brand aims to orchestrate an ecosystem around small cases to develop products that help create simple-to-understand portfolios. The idea behind the brand is to create an investing experience that is delightful, effortless, and innovative.

IBS Intelligence interacted with Kamath to understand Smallcase–its offerings, and other growth plans.

How is Smallcase different from any other investment firm out there?

All other investment firms are either operating execution/transaction plays or distribution platforms whereas we are building an open ecosystem layer for multiple firms (brokerages, distribution apps, investment managers) to create, offer and enable a new class of products called Smallcases – stock/ETF baskets reflecting various ideas, strategies and objectives. Smallcase works on a direct indexing and model portfolio that offers investors the option of creating or investing in diversified and long-term portfolios of stocks or exchange-traded funds.

What are the products you are currently working on to transform investing?

On the platform layer – we have built globally unique interfaces like Publisher – a business in a box solution with all modules for investment managers and advisors to start, run and grow their practice and Gateway — an API layer deeply integrated with the largest brokerages for anywhere stock/ETF transactions (similar to a payment gateway/UPI equivalent for exchange transactions)

On the products layer – one of the most popular Smallcase is a simple asset allocation strategy across 3 asset classes- equity, gold and fixed income with 4 ETFs. This is a great way for new investors to start their equity journey with diversification. Similarly, we have very differentiated and innovative smallcase products today for both new and experienced investors to add to their portfolios.

How will you bust the myth that people have around investing in stocks or other such portfolios?

The myth about investing in the stock markets is that it is tough and risky. By building readymade portfolios of stocks reflecting various ideas – it becomes simpler for investors to choose what they understand & are bullish on and portfolio level diversification reduces the risks that come with single stock investing.

What is your growth strategy in the next 1-2 years?

Our strategy isn’t to target users from a specific age group but to enable every investor to use small cases to build their ideal long-term portfolios. This includes building diverse products, expanding to more asset classes and instruments, working with multiple channels, and building a vast ecosystem of business partners.

What are Samllcase’s expansion plans?

We are exploring and very keen on the global opportunity in the next 12 months. There are multiple ways to kickstart this and will eventually require deep, strategic partnerships from the local ecosystems. We are studying multiple markets – both emerging and developed. And have strong use cases in both.

Would the platform also educate people about investing in stock?

Content and education is an important aspect of not just our growth but for the entire wealth/assets industry. With more financial literacy, the penetration of investment products will only increase.

Any comment for the IBSi readers?

We strongly believe that not just the future of finance, but that the future of investing will be social and are building capabilities and features to enable this across the Smallcase ecosystem.