Zerodha ties up with Smallcase to enter mutual fund business

India's biggest stockbroker Zerodha is set to form a joint venture with Sequoia-backed smallcase to enter the mutual fund business. Zerodha's founder and CEO Nithin Kamath, took to twitter to announce the tie-up. In a tweet he said, "While awaiting final approval of our AMC (mutual fund), we asked if we should build it ourselves or collaborate. Given the 6+ years of experience that @smallcaseHQ has in building investment products, it made perfect sense to create a joint venture to build the AMC".

In a separate tweet he said the upcoming AMC will be a joint venture between Zerodha and smallcase and will use learnings and shared values from both companies to build an enduring fund house.

As per Economic Times, Kamath said smallcase, which hosts baskets of stocks or ETFs on its platform, will help Zerodha build simple low-cost passive mutual fund products. Both are Bengaluru-based startups, and Smallcase counts Zerodha as one of its investors.

Nithin Kamath also exuded confidence on smallcase saying, smallcase has been successful in helping millions of demat account holders build a healthy long-term portfolio, and there's immense potential to bring the same principles of simplicity and transparency to mutual funds to bring in a new segment of investors.

Zerodha had already received in-principal approval from SEBI on its mutual fund application in September 2021.