Startups, VCs rush to digitize India's mutual fund sellers

Copyright © HT Digital Streams Limit all rights reserved. Startups and VCS race to digitize India’s growing army of mutual fund distributors coincide with an increase in distributors of mutual fund. (IStockphoto) Summary of mutual fund agents is looking for tracking instruments to scale faster and meet the growing need for personal investment advice. Startups chase to build technology for India’s swelling army of mutual fund distributors (MFDs), a segment that is rising with the country’s roaring asset management industry. The event did not notice by venture capital investors who pour money into space. Companies such as Assetplus, Zfunds and Wealth build digital instruments that buy and manage investors for MFDs streamline, which help investors to choose mutual fund schemes, while earning a commission from the fund houses. The startups all offer customer-dashboards and UPI-based payments to dealing with repetitive SIPs and compliance, allowing distributors to scale faster and reach investors outside the most important Metro areas. Assetplus, a startup of Chennai, supported by the rain of Zerodha and Incred, is in talks to raise a $ 20 million financing round of new and existing investors, according to two people familiar with the case. The company had previously acquired $ 6 million from Fidelity’s eight roads in late 2024. Other players who also attracted capital include Zfunds who collected $ 3 million from Elevation Capital and PB FinTech CEO (CEO) Yashish Dahiya in December; and the rich who acquired about $ 5.5 million from Alpha Wave in May last year. Rising investor interest coincides with an increase in MFDs. The number of individual distributors jumped 24% to 29,555 over the last financial year, with a five -year high, fueled by rising assets under management and aggressive campaigns by the Association of Mutual Funds in India (AMFI). Top-level distributors-which managed at least £ 100 crore in assets-which were up to 3,158 from 2,499 in the previous year, and jointly supervised over £ 25.35 billion in Aum. Asset Plus co-founder and CEO Vishranth Suresh refused to comment on the funding headlines. “The system has been broken,” says Aditya Agarwal, founder of the rich. “Banks and programs for direct consumers do not provide personal guidance. MFDs do not have the tracking instruments to serve users on scale.” Zfunds CEO Manish Kothari said the median age of Mutual Fund investors have fallen sharply since 2019, with more 30 years old entering the market with disposable revenue. “As they get younger, the need for technical increases is. As they get richer, the need for advice increases,” he said. The new platforms, he argues, combines technology with the human touch of a distribution network. In the past five years, the industry has added more than 100,000 individual MFDs and 225,000 total distributors, including others such as corporate MFDs, private limited or partnership firms, and Euin holders (employees of banks, national distributors or other MFDs). In general, the industry has 178,000 distributors, including 162,000 individual MFDs. Birendra Sharma, a Raipur-based Mutual Fund distributor and founder of the wealth management firm Gullak, said the use of some instruments such as a united customer dashboard contributed to making KYC update easier-a process that would need a few days and multiple intermediaries. Sharma now runs almost 1,200 clients, from 300 six years ago, with a majority of them sitting from Tier-III villages such as Motihari in Bihar and Bilaspur in Chattisgarh. Varun Krishnan, another distributor in Bengaluru, said he now finds it easier to manage the different portfolio service of different customers using adjustment tools. “Distributors are a fairly small group and these platforms regularly work with us to get feedback. Some very complicated problems such as documentation from NRI customers are much easier today,” Krishnan told Mint. However, adoption remains fragmented, and it will probably take a lot of time before the distributors of the town are fully digitized, according to Sharma. “Since many of them handle regional customers, they are familiar and more comfortable with the traditional route such as customers on board on paper and personal meetings for folio planning.” An important reason for the increasing interest is the excellent achievement of sensible corporate advice, supported by the themes of Singapore. The company emerged as a clock for investor interest in the MF distribution and advisory space. Since its market debut in May 2022 at £ 650, its shares have closed fourfold at £ 2884.60 on Monday, strengthening the long-term growth visibility for the sector. Last year, he agreed to acquire the distribution business of the Mutual Fund of Indus Capital for £ 123.75. The renewed interest comes as other financial giants, including Groww, Cred and PB Fintech, which doubles wealth management as a core part of their strategy. The growing demand for personal financial plans is an important driver. Wealthy works with 6,000 MFDs serving over 100,000 customers and has been running $ 720 million in AUM over the past year. Meanwhile, Assetplus is aimed at first MFDs, which is more likely to adopt new technology. “Newer MFDs show higher technology adoption because they understand that scale is more feasible with digital instruments than without them,” says Suresh. With two-thirds of its MFDs in smaller cities such as Coimbatore and Mysuru, Assetplus is doing rapid growth in India’s fast expanding “B30” towns, which now accounts for 19% of the country’s total mutual fund. Catch all the corporate news and updates on live currency. Download the Mint News app to get daily market updates and live business news. More Topics #mutual Funds #Startups Read the following story