“Alongside some existing investors, the round may also see participation from other new investors,” one of the people cited above said. “The deal is expected to close in the coming weeks as the company has already received a few term sheets,” the person added.
The second person added that the company plans to use the funds to expand operations across technology, investment, and sales functions.While Centricity declined to comment, Lightspeed did not immediately respond to a request for a comment.
This marks a sharp increase from its previous valuation of $20 million when it raised about $4 million in its seed funding round led by Burman Family Holdings and other angel investors including Shantanu Agarwal (LNJ Bhilwara group) and Arun Jain (Intellect design arena/Founder-Polaris software Labs).
Techcrunch in July first reported that the startup was in advanced talks to bag more than $20 million in a funding round led by Lightspeed.
Meanwhile, some of Centricity’s other existing investors include Devesh Sachdev (Fusion Microfinance), Rajesh Razdan (Devtron Labs), Ankush Nijhawan (TBO.com), Purrshottam Bhaggeria (Filatex group), Abhay Agarwal (Burman family office) & Pravin Jain/Navin Jain (Supercircle family office).
Founded in 2022 by Manu Awasthy, Aditya Shankar, Gaurav Kumar Tiwari, Manish Sharma and Pushpendra Singh, Centricity provides a cost effective, and a technology enabled platform to help investment professionals manage their client portfolios better. The founding team brings together decades of experience in wealth management and aims to resolve challenges faced by wealth managers, their clients and asset managers.
In FY23, the company reported a total revenue of ₹13.5 crore and a net loss of ₹1.3 crore, as per data sourced from Tracxn.It is yet to file its FY24 financial results.
Over the years, this space has seen interest from several large private equity players. Some examples include Blackstone’s majority stake in asset & wealth management company ASK Investment Managers Ltd (ASK) in 2022, Bain Capital’s 25% stake in 360 ONE (formerly known as IIFL Wealth) in the same year and US-based private equity firm TA Associates’ investment in Ahmedabad-based Prudent Corporate Advisory Services in 2018.
The heated activity in this space has now trickled down to smaller companies. Last month, wealth-tech platform Stable Money, run by former Navi Mutual Fund chief executive Saurabh Jain, raised $15 million in a funding round led by RTP Global and Z47 (formerly Matrix Partners India).
Dezerv raises capital
In the same month, wealth management platform Dezerv also secured $32 million in a funding round led by Premji Invest. Other existing investors including Z47, Accel and Elevation Capital also participated in the round.
“Over 65% of HNI (High Networth Individual) portfolios often suffer from underperformance due to mis-selling and over-diversification,” Dezerv’s co-founder Sandeep Jethwani said at the time of funding. The company added that the segment remains underserved by traditional wealth managers and retail banks with nearly two-thirds of over 250,000 mutual fund portfolios, comprising over ₹60,000 crore struggled to beat benchmarks, resulting in missed gains of over ₹2,500 crore.
As India witnesses a rise in wealth creation with many upcoming high networth investors seeking personalized guidance on financial products and services coupled with higher household saving and incentive-led financial inclusion programmes, several new-age wealth-tech companies have found immense scope for disruption.
Other market watchers have also alluded to the robust opportunity for traditional as well as new age digital companies to capture gains in this space.Redseer’s partner Mrigank Gutgutia, who tracks the overall fintech sector closely, expects the opportunity for the wealth and asset management players to more than double by the end of this decade fuelled by the rapid financialization of Indian assets since the pandemic. “This is just the starting point,” he said.
Gutgutia further explained that the household savings which were initially invested in assets like real estate and gold are seeing more inclination towards other instruments like mutual funds and direct stock market investments, thus underscoring the large addressable opportunity for asset managers. More than 50% of new mutual fund accounts have opened digitally over the last year and they have seen an average growth of 13-15% on a year-on-year basis, he said.
He added that millennials are also coming of age with interests to invest directly in stock markets without the involvement of brokerages. They are the next levers of growth in the ecosystem and are expected to play an integral role in wealth creation over the next decade.
Furthermore, HNIs, ultra-HNIs and the emerging affluent households are also seeing a higher pace of growth in their holdings over the last 2 years. As the addressable market grows with higher disposable incomes, funding for such startups, even at an early stage, will continue as investors look to capitalize on the large opportunity, Gutgutia said.