Amazon widens non-etail play in India as local giants develop super apps

Investment in wealth management firm Smallcase marks latest foray in non-retail start-up space even as Tata, Reliance, Adani escalate presence in digital commerce

Smallcase marks Amazon’s latest investment in the Indian fintech space, some of the others being digital insurance firm Acko General Insurance and credit provider Capital Float.

Late last week, the Adani Group announced plans to launch a ‘super app’ — similar to ones being developed by domestic rivals Tata Sons and Reliance Industries — through its newest venture, Adani Digital Labs. These apps, aimed to offer an entire range of services from a common platform, are seen as India Inc’s response to the increasing presence of Amazon and Walmart (via Flipkart) in the domestic digital space.

Amazon.com, meanwhile, has been expanding its presence here, not only through its flagship e-commerce platform but also via investments in start-ups from a wide range of sectors. The latest company to join its portfolio is Smallcase Technologies, which has raised $40 million in a round led by Faering Capital. Apart from Amazon, PremjiInvest, Sequoia Capital India and Blume Ventures also participated in the round, said a Bloomberg report.

Weighted investments

Founded in 2015 by three alumni of IIT-Kharagpur, Smallcase offers portfolios of stocks and exchange traded funds (ETFs) weighted to track a theme, strategy or objective. According to the company, its investing products are “based on simple ideas” “created by finance experts and backed by solid research”. Further, they are fully customisable.

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“A new set of younger, high risk-taking investors are participating in the capital markets and they want complete transparency,” the Bloomberg report quoted Vasanth Kamath, the start-up’s Chief Executive Officer, as saying in an interview. “We build simpler, low-cost investment products, each reflecting a theme, a strategy or objective.”

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Smallcase marks Amazon’s latest investment in the Indian finance-technology (fintech) space. Its other fintech investees include digital insurance firm Acko General Insurance and credit provider Capital Float, said the Bloomberg report.

Venture fund for SMBs

In April, the company announced a $250 million venture fund to invest in Indian start-ups engaged in the digitisation of small and medium businesses (SMBs).  The Amazon Smbhav Venture Fund would invest in start-ups that focus on helping small businesses come online, sell online, automate and digitise their operations, a TechCrunch report said. “Small and medium businesses are the engine and lifeblood of economies,” it quoted the company’s CEO Andy Jassy as saying. “We are passionate about accelerating SMBs.”

For starters, it led a $10 million investment in M1xchange, a three-year-old start-up that runs an invoice discounting marketplace exchange for MSMEs. The fund would also focus on the agriculture and healthcare sectors, it said.

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