Investors are showing a keen interest in Indian wealthtech startups as the middle class grows and startups challenge traditional financial advisors for high-net-worth clients. Premji Invest is currently in advanced talks to lead a funding round of $30 million to $40 million in Dezerv, an app that provides investment solutions to India’s wealthy individuals. The talks value Dezerv at about $170 million pre-money, which is more than double its previous valuation.
Lightspeed Venture is also in advanced talks to lead an investment round of over $20 million in Centricity, a digital wealth management platform. Peak XV recently agreed to invest around $35 million in Neo, a wealth and asset management startup. The high-net-worth and ultra-high-net-worth segments are growing in India, leading wealth management firms to expand their networks to cater to this market. Currently, only about 50-55% of India’s wealth management market is professionally managed.
Startups in the wealthtech sector are aiming to offer more personalized and data-driven recommendations to customers, cutting out the middlemen and serving a market segment that is currently underserved by traditional players. Scripbox, backed by Accel, has seen a significant turnaround in its business, becoming profitable and managing assets of over $2 billion. India is also experiencing a surge in the financialization of its economy, with sectors like insurance and mutual funds witnessing significant growth. The number of mutual fund accounts has increased 3.5 times since 2015, with a rise in low ticket size systematic accounts.
There is still ample room for growth in India’s mutual fund industry, with the mutual fund AUM-to-GDP ratio at 15% compared to the global average of 75%. Major financial institutions project long-term growth in the wealth management space, with UBS estimating a 22-25% CAGR in active AUM. Startups like Jar, backed by Tiger Global, are helping more Indians invest in mutual funds, stocks, and gold, targeting a $100 billion Indian gold market.
India’s affluent population is expected to grow significantly in the next five years, with the number of individuals earning over $10,000 annually more than doubling. This provides a strong tailwind for financial services platforms targeting this demographic. CRED recently acquired mutual fund investment platform Kuvera, while smallcase is in talks to raise $40 million. Reliance and BlackRock have partnered to form a joint asset management venture in India, aiming to provide tech-enabled access to innovative investment solutions for millions of Indian investors.
