Companies
Smallcase's early backers Peak XV, WEH to sell part stakes in new funding round
Summary
Smallcase is in talks to raise over $50 million in a mix of primary and secondary transactions.
BENGALURU : Smallcase's early investors, including Peak XV Partners and WEH Ventures, are looking to partly offload their stakes in the fintech, which is in talks to raise over $50 million in a mix of primary and secondary transactions, three people close to the development told Mint.
The latest round is expected to value the Bengaluru-based startup at around $300-350 million. It last raised $40 million in its Series C funding round, led by Faering Capital, at a valuation of around $200 million in 2021. New investors—Amazon and Premji Invest—participated in the round.
In a secondary transaction, shareholders sell their stake to new or existing investors and no new capital is injected into the company.
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The company plans to use the capital raised through primary transactions for expansion, one of the people said.
Investment bank Avendus is helping the company stitch the round, which is expected to close by the end of December, the person added.
While Peak XV, WEH and Avendus declined to comment, Smallcase did not immediately respond to Mint's request for comments.
Liquidity needs
Since its split from Silicon Valley-based Sequoia Capital in 2023, Peak XV has sold stakes in many portfolio companies, including Awfis and Rebel Foods. The venture capital firm, formerly known as Sequoia Capital India, has raised more than a billion dollars in exits over the last 12-18 months.
WEH, which has backed startups like Jar, AppsForBharat, and Pratilipi, is looking to raise its next fund and is seeking exits from a couple of portfolio companies to increase liquidity, one of the people said.
Also Read: How Smallcase has queered the pitch for advisers and analysts
While Peak XV is the largest shareholder, Smallcase also counts Blume, Beenext, DSP Group, Arkam Ventures and HDFC Bank among its backers.
Zerodha's Nithin Kamath, DSP Group's Hemendra Kothari and Trust Group and Rare Enterprises' Utpal Sheth have also invested in the fintech.
Smallcase performance
In August 2021, the fintech detailed plans to use the capital to launch a wider suite of investment products for retail investors as well as enhance the platform and its capabilities. Since then, it has significantly improved its revenues, although its losses have widened.
In 2023-24, the company reported a revenue of ₹74.8 crore from ₹42.7 crore a year ago. Its losses widened to ₹174.1 crore from a loss of ₹165.3 crore in 2022-23.
Also Read: Peak XV is far from the Sequoia tree. Can it retain its parent’s aura?
Founded in 2016 by three IIT Kharagpur graduates—Vasanth Kamath, Anugrah Shrivastava and Rohan Gupta—competes with StoxBox, Costa Savings and MakeMyFund, among others.
