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As new generation direct mutual fund distributors like Groww grab market share, traditional offline financial distributors are increasingly searching for their own technology stack to remain relevant and grow. Chennai-based AssetPlus and Gurugram’s ZFunds are tapping into that opportunity. They are working with these offline agents, providing them with a technology stack to help them offer the best investment advice and products to their clients.
Venture funds are opening up to backing them too. According to two people in the know, ZFunds is in talks with Elevation Capital to lead a Rs 25 crore equity funding round, which will be its first institutional funding round. AssetPlus, which had previously raised equity funding from Rainmatter and InCred, has secured Rs 50 crore in another institutional funding round led by Eight Roads Ventures, a global investment firm backed by Fidelity.
Eight Roads Ventures pumped in Rs 40 crore and another Rs 10 crore was invested by Zerodha-backed Rainmatter in this round. Leadership Building Your Winning Startup Team: Key Strategies for Success By - Dr. Anu Khanchandani, Startup Coach with more than 25 years of experience View Program Office Productivity Zero to Hero in Microsoft Excel: Complete Excel guide 2024 By - Metla Sudha Sekhar, IT Specialist and Developer View Program Web Development C++ Fundamentals for Absolute Beginners By - Metla Sudha Sekhar, IT Specialist and Developer View Program Web Development Java 21 Essentials for Beginners: Build Strong Programming Foundations By - Metla Sudha Sekhar, IT Specialist and Developer View Program Leadership Validating Your Startup Idea: Steps to Ensure Market Fit By - Dr.
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The company has around 12,000 distributors across the country. They offer all forms of mutual funds and health and term insurance products. ZFunds was founded in 2019 by Manish Kothari and Vidhi Tuteja, who were with PB Fintech previously.
AssetPlus was founded in 2016 by IIT Madras graduates Suresh and Awanish Raj. Both these startups are competing with two mutual fund distribution giants in the country, NJWealth and Prudent. While the latter is a listed firm, Surat-based NJWealth is the largest offline mutual fund distribution channel in the country.
“NJWealth has an AUM of estimated Rs 2.5 lakh crore, that shows how big the offline opportunity in India still is,” said an industry executive aware of the developments. Prudent has an AUM of more than Rs 1 lakh crore and has around 18 lakh investors, its September quarter stock exchange filings showed.
The executive quoted above said that while these two large players have achieved massive scale, they are very traditional offline-based companies and the fintech sector could produce another with a tech-first approach. Industry estimates suggest there are around 3 lakh registered mutual fund distributors of which around 50% will be active and only around 2,000 of them would have sizable AUM of a few crores. Data from AMFI (Association of Mutual Funds in India) show while the AUM of the industry has grown to Rs 65 lakh crore in October this year from Rs 25 lakh crore in 2019, the number of unique investors is around 5.
5 crore. Industry insiders believe that offline distributors are a key for this number to grow. “While direct platforms are mostly used by young investors who are starting out with mutual funds, as one scales up his or her investments, a distributor or an agent plays a crucial role offering the right advice, that is the opportunity these new generation players are trying to grab,” said an investor who has evaluated these companies.
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