Amazon bets on investment business, puts funds in Smallcase

BENGALURU:  Amazon has forayed into the burgeoning investment industry in India by betting on a Bengaluru-based wealth-tech start-up Smallcase. The Series C  $40-million fundraise was led by Fearing Capital, Premji invest and existing investors including Sequoia Capital India, DSP Group, Beenxt, Blume Ventures, and WEH Ventures.

The investment is as a part of Amazon’s funding strategy in early-stage start-ups in India through its $250-mn Amazon Smbhav fund initiative announced in April this year. Although both Amazon and Smallcase haven’t provided details of whether this will be a strategic investment under which one can invest in equities through the e-tailer’s app, this will further the US based firm’s ambitions to consolidate its position in the growing wealth management industry.

According to a recent report by the State Bank of India, the country added nearly 44.7 lakh retail investor accounts during the first two months of Q1, FY22 with the confidence of the middle-income group in India’s equity market sharply rising. This is particularly true of the millennial investors who wish to invest a part of their savings/income in markets, especially in the face of any adverse circumstances.

For Amazon, this will be the third vertical in the financial services sector apart from the insurance and payment that the e-tailer is now engaged in. It had earlier pumped in Rs 700 crore in its payment subsidiary Amazon Pay, bringing the total infusion in the company at nearly $700 million. “By increasing product selection and convenience, this will provide an additional channel for consumers to participate in the equity markets,” an Amazon spokesperson said.