Smallcase, a wealth management company backed by Amazon, has seen significant growth in the past two fiscal years, with its operating scale increasing by over 13X. The company's revenue rose from Rs 2.15 crore in the financial year 2020 (FY20) to Rs 29 crore in the last fiscal year. The operating income grew 2.5X to Rs 29.17 crore in FY22, while losses amounted to Rs 95 crore, according to the company's consolidated financial statements.

Transaction fees charged by Smallcase to brokers made up 33.5 per cent of its total collection, which increased twofold to Rs 9.76 crore in FY22. Income from platform fees and subscriptions, such as the Tickertape Screener, increased 4.9X and 2.1X to Rs 8.43 crore and Rs 7.18 crore, respectively, in the last fiscal. Gateway, one-time integration, and referral fees contributed Rs 3.8 crore to the company in FY22.

In August 2022, Smallcase raised a $40 million Series C round, leading to a 3.64X increase in financial income, mainly from interest on fixed deposits, to Rs 7.03 crore in FY22. The company enables retail investors to choose portfolios that consist of stocks and exchange traded funds (ETFs) in a proportion that maximises returns. It works with broking partners, such as AxisDirect, Groww, Zerodha, Upstox, HDFC Securities, etc, and claims to have 5 million users on the platform.

Marketing and promotion expenses were the largest cost center for Smallcase, forming 46.2 per cent of overall expenditure and increasing 6.2X to Rs 60.9 crore in FY22. Employee benefit expenses grew 2.14X to Rs 50.4 crore during FY22, including non-cash expenses of Rs 7.68 crore for employee stock ownership plans (ESOPs). Smallcase spent Rs 11 crore on technology expenditure, leading to an overall cost increase of 3.16X to Rs 131.7 crore in FY22 from Rs 41.6 crore in FY21. As a result, losses increased 3.38X to Rs 95.53 crore in FY22 from Rs 28.26 crore in FY21.

Smallcase's return on capital employed (ROCE) and earnings before interest, taxes, depreciation and amortisation (EBITDA) margins worsened to -32.3 per cent and -259.48 per cent, respectively. The company spent Rs 4.51 to earn a single unit of operating revenue in FY22. Smallcase was founded in 2016 by Vasanth Kamath, Anugrah Shrivastava, and Rohan Gupta and has raised around $62 million from investors, including Premji Invest, Sequoia Capital, and Blume Ventures. The company's last valuation was $200 million. Zerodha's Rainmatter is also an investor in Smallcase.

Smallcase's premise is centered around delivering performance to its subscribers first, followed by engagement. With 5 million users, the company will soon face the question of independence or becoming a key feature on a larger financial offering. It is expected that 2023 will be the year when the company makes a decision on this issue.