(Money Marketing) - Amazon has invested in Indian fintech start-up Smallcase, laying the foundations for an incursion into the wealth management space.
The investment was made as part of a $40m (£30m) Series C funding round, led by Faering Capital.
“In April this year, we launched a $250m Amazon SMBhav Venture Fund (ASVF) to invest in early-stage tech start-ups,” said a spokesperson for Amazon.
“As part of this Fund, we are excited to partner with Smallcase in their journey to offer innovative consumer investment products.
“By increasing product selection and convenience, this will provide an additional channel for consumers to participate in the equity markets.”
Ian McKenna, director of Financial Technology Research Centre, said the deal should be a “wakeup call” to the wealth management industry.
Amazon has had a limited insurance operation in the UK for several years.
It dipped its toe further into the financial services sector last year, when it announced its intention offer car and motorbike insurance in India.
The announcement was part of a deal with an Indian insurance company – Acko General Insurance.
McKenna said he believes the wealth management industry should fear Amazon.
“Its reach with consumers and understanding of behaviour are both spectacular and frightening,” he told Money Marketing.
“This move may look tentative and remote but it’s the direction of travel that people need to recognise.
“It would be an incredibly brave person who bet against it developing the capability to understand exactly what would make different types of investment products attractive to various consumers.
“Imagine its ability to say people like you liked this type of ISA, pension, Insurance etc.
“If this isn’t a wakeup call to the industry nothing is.”
By Lois Vallely
