Wealth management start-up Fisdom, which helps customers manage their mutual fund investments, has raised Rs25 crore in a Series B round led by Quona Capital, a specialist investor in financial technology companies, with participation from existing investor Saama Capital.
With the fresh funding, Fisdom (Finwizard Technology Pvt. Ltd) plans to add new financial products like insurance schemes and the National Pension System, improve its technology, expand its team and accelerate customer acquisition.
Fisdom allows consumers to discover and make mutual fund investments using a mobile app. It has partnerships with banks for sourcing investment schemes. It was founded in 2015 by Subramanya S.V., former managing director at venture capital firm Bessemer Venture Partners India, and Anand Dalmia, a veteran investment banker.
“In Fisdom, we are thrilled to back a team that is taking a uniquely holistic, customer-centric approach to developing savings, investments, and financial management tools for emerging, underserved consumers,” said Ganesh Rengaswamy, founding partner at Quona Capital, which manages the Accion Frontier Inclusion Fund.
Quona launched the $141-million Accion Frontier fund earlier this year to invest in fintech start-ups in emerging markets, including India, which is likely to be its largest market. Fisdom is Quona’s largest investment in India so far.
In the last one year alone, Fisdom claims to have facilitated more than 1 lakh mutual fund investments worth more than Rs100 crore. Nearly 95% of its customers access Fisdom through its mobile app available on iOS and Android.
The app helps customers choose the right amount and type of mutual fund investment by assessing their short-term savings goal and other retirement options. An algorithm is employed in the background to suggest the schemes a user could invest in. Fisdom makes money via commissions made from funds sold on its platform.
“Our three year target is to have half a million active investors on the platform consuming multiple products. Demonetization has helped the company positively. However it has been an indirect effect; it is not that people who used to hoard cash suddenly started investing in capital markets due to demonetization. Due to the massive liquidity in the banking system, rate cuts on savings bank deposits and FDs forced customers to evaluate other options.,” Subramanya S.V, chief executive officer said in an email.
“Apart from this, micro finance industry’s campaign around ‘Mutual Funds Sahi Hai’ in that sense was timed perfectly; the combination is resulting in unprecedented inflow into capital markets and we are a large beneficiary of the trend,” he added.
The company raised $1 million in funding from Saama Capital in October last year, and $500,000 in seed funding from a cluster of angel investors including Silicon Valley-based venture capitalist Rob Chandra, CommonFloor co-founder Sumit Jain, TaxiForSure co-founders Aprameya Radhakrishna and Raghunandan G., and others.
Fisdom estimates that Indians hold more than $1.35 trillion of their wealth in bank deposits, and often don’t invest in capital markets or mutual funds for various reasons like low financial literacy and low trust in market. It aims to fills this gap in the Indian ecosystem by offering customised investment advice to users who would typically have to consult with a wealth manager or an accountant for investment advice.