Zerodha Fund House, the asset management company (AMC) under the Zerodha Group, is reportedly in preliminary discussions with various investors to raise funds amounting to $100 million. If successful, this would mark the first instance of external funding for any entity within the Zerodha Group, which has been self-funded since its establishment in 2010 by brothers Nithin and Nikhil Kamath.
The talks are currently in the early stages and may take several months to reach a final agreement, according to sources familiar with the matter. Zerodha has significantly expanded its mutual fund presence, introducing three schemes last October, shortly after receiving approval from the Securities and Exchange Board of India (SEBI) in August 2023 to commence AMC operations.
Zerodha Fund House, a joint venture between Zerodha and invest tech platform smallcase, has expressed its commitment to being a passive-only AMC, focusing on transparent and affordable mutual fund offerings. Nithin Kamath, Zerodha’s co-founder and CEO, highlighted the motivation behind entering the mutual fund space, emphasizing the need to increase market participation.
This move to seek external capital coincides with heightened competition in the Indian asset management market. Rivals such as Groww have entered the fray, with the backing of Reliance-backed Jio BlackRock, armed with a $300 million war chest. Groww itself has launched new mutual fund schemes, rapidly expanding its systematic investment plans (SIPs) monthly.
In a related development, CRED, led by Kunal Shah, entered the wealth management sector by acquiring invest tech platform Kuvera in February. This strategic move positions CRED in direct competition with industry players like Zerodha and Groww.
