[The Turning Point] How joining hands with a second brokerage partner led to a growth spurt for smallcase

The Turning Point is a series of short articles that focuses on the moment when an entrepreneur hit upon their winning idea. Today, we look at stock investment platform smallcase, which has 300 ecosystem partners serving 40 lakh users.

Stock investment platform Smallcase , which has now more than 13 broker and 300 ecosystem partners including Zerodha, Upstox, Groww, etc., and 40 lakh users was started in 2015 by IIT Kharagpur alumni Vasanth Kamath, Anugrah Shrivastava, and Rohan Gupta, who spent initial days outside Zerodha’s office initially, and the real growth story accelerated in 2018 with its second broker partner.

Bengaluru-based smallcase — written in lower case — is an online investment platform that allows investors to invest in “themes”. Backed by the likes of Amazon, Sequoia, and Faering Capital, it is one of the fastest-growing platforms helping people invest in a simpler and easier manner.

“We realised that India hasn't seen much digitisation in the investing space. When we started, most consumers used to actually call their brokers and trade. We felt it was not the best way to invest directly into individual stocks as markets are volatile and you take a very high risk when you build your own stock portfolio. It would be simpler, better, and healthier if there could be a portfolio layer on top of these stocks. This led us to conceptualise a platform like smallcase,” says Vasanth, Founder and CEO of smallcase, in a conversation with YourStory.

The initial days

Vasanth, Anugrah, and Rohan were friends and hostel mates. Vasanth was one of the first employees of data platform Tracxn after graduating from college in 2013. He joined as an analyst and researched more than 20,000 startups until the startup bug bit him. 

Around the same time, Anugrah, Vasanth’s senior, who had worked with him for a college cultural festival, was working with Japanese financial company Nomura, building and working with equity structured products. They were in touch after college, and Anugrah was keen to build “something more diverse”.

Rohan, meanwhile, was with Goldman Sachs on platforms for the US markets. Their common interest in building a financial platform brought the three together, and in July 2015 they decided to build a new financial instrument for trading. Their idea involved creating thematic portfolios for retail investors, and they started up with smallcase.

However, their idea had not been acted upon anywhere. “So, it wasn't easy for us to know that this would happen at some point in India,” Vasanth says. 

Speaking of earlier days, he says the founders would go and talk to potential customers, and a lot of time was spent sitting outside the Zerodha office. 

“There was no clear green signal from the potential customers we spoke to,” he says. People found the concept interesting, but said they would “see” when it was launched. 

“The first early days we were just about thinking the first principles - how would someone completely new to the equity markets discover us, how do we not make trading so daunting, how do we make it jargon-free and simple,” Vasanth recalls. 

The platform was launched in July 2016, a year after the trio started up.

The ‘big’ turning point

Vasanth says till 2018 smallcase worked with Zerodha, its first and only brokerage partner at that time. But, the real turning point came when the Bengaluru-based startup added its second brokerage partner Axis – that’s when the company hit the acceleration button. 

“It was a big turning point because we became broker-agnostic and started building the smallcase ecosystem that we were building,” Vasanth says. 

The CEO says all the growth — from two brokers in 2018 to 13 now, and overall 300 ecosystem partners — happened in the last three years. In terms of users, from one lakh in July 2018, smallcase now has more than 40 lakh users. In terms of team size, the fintech startup has grown from 100 people 18 months ago to 250 people right now.

In 2019, smallcase also launched its Publisher Platform, a business-in-a-box SaaS solution to democratise investment product manufacturing.

It has more than 150+ investment managers and advisors. To accelerate this business, smallcase recently acquired the founding team of Nirvana.work to lead product and engineering functions for the smallcase Publisher Platform.

Vasanth says going forward smallcase is working on adding global equities and bonds to the platform. Referring to the popular cryptocurrency, he says it’s “very interesting”, but given that smallcase operates in a regulated environment, it would not add this to the platform “without regulatory clarity”.

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Edited by Teja Lele Desai


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