WEH Ventures’ Strategic Exit from Smallcase: A Significant Milestone
WEH Ventures, a seed-stage venture capital fund based in India, recently made headlines with its successful exit from Smallcase. This move not only returned the entire capital of its Rs 20 crore Fund I but also delivered an impressive internal rate of return (IRR) of 38%. Such achievements are rare in the competitive world of venture capital, especially in early-stage investments.
A Bold Investment in Product-Led Innovation
Back in 2018, WEH Ventures made a strategic decision to invest in Smallcase, a platform that had just begun its journey with a single broker partnership and limited assets under management. At a time when the focus was primarily on distribution-first wealth-tech models, WEH took a contrarian approach. They believed in the power of “non-obvious, product-led innovation” in large but underserved markets.
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Growth Trajectory: Over six years, Smallcase saw a 100-fold increase in assets under management and an 80-fold rise in revenue. This growth trajectory highlights the potential of innovative products in reshaping industries.
- Market Impact: Today, Smallcase influences the investment journeys of nearly 10% of India’s demat account holders. Its B2B infrastructure allows financial advisors to create and distribute portfolios, earning it the nickname “Shopify for capital markets.”
Consistent Support and Strategic Exits
WEH Ventures’ involvement with Smallcase was not limited to initial funding. They participated in every funding round from seed through Series C, demonstrating their unwavering commitment to the company. The full exit occurred during the Series D funding round, marking a well-timed and strategic decision.
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Deepak Gupta’s Insight: Deepak Gupta, Partner at WEH Ventures, emphasized the importance of “clarity, conviction, and consistency” in their investment journey. These principles guided them through each growth phase of Smallcase.
- Vasanth Kamath’s Acknowledgment: Vasanth Kamath, Founder and CEO of Smallcase, appreciated WEH Ventures for their early belief in the company’s mission and their consistent support. This partnership highlights the value of aligning with investors who share a long-term vision.
WEH Ventures’ Diverse Portfolio
Since 2017, WEH Ventures has invested in over 25 startups across various sectors, including fintech, consumer products, and digital media. Their portfolio includes notable names like Jar, Pratilipi, MasterChow, and Animall. This diverse portfolio underscores their commitment to supporting innovative startups that promise significant market impact.
Lessons for Aspiring Investors and Startups
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Early Conviction Pays Off: WEH Ventures’ success with Smallcase illustrates the importance of early conviction and staying aligned with founders during the build phase. This approach can lead to substantial returns and impactful industry contributions.
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Focus on Innovation: By backing product-led innovations in underserved markets, investors can uncover opportunities that others might overlook. This strategy requires a deep understanding of market needs and a willingness to take calculated risks.
- Partnerships Matter: Building strong relationships with investors who believe in your mission can be crucial for a startup’s growth. Such partnerships provide not only financial support but also strategic guidance.
A Broader Perspective on Venture Capital
The venture capital landscape is ever-evolving, with investors continually seeking the next big opportunity. WEH Ventures’ journey with Smallcase serves as a reminder of the potential rewards of thoughtful investments and strategic exits. As the startup ecosystem grows, aspiring investors and entrepreneurs can learn valuable lessons from such success stories.
For more insights into the startup world, you can explore Smallcase’s journey and WEH Ventures’ portfolio.
What are your thoughts on product-led innovation in underserved markets? Could this be the key to unlocking new opportunities in your industry?
