Scripbox, a Bengaluru-based online mutual funds investment platform, closed Series-B round of funding by June end. Philanthropic investment firm Omidyar Network, founded by ebay founder Pierre Omidyar, and other existing investors including venture capital firm Accel Partners invested an undisclosed amount in the company.
The start-up firm would use the funds raised in Series B round to reach out to people in 1,000 cities by 2020. So far the company has reached out to individuals across 370 cities and towns, according to theEconomic Times. It had raised Rs. 16 crores in Series A round of funding in August last year.
Scripbox wants to expand its platform to more cities to spread awareness among young professionals, as the company CEO Ashok Kumar ER is of the view that youngsters are reluctant in investing in mutual fund.
“We want to encourage people to explore inflation-beating instruments rather than inflation-par instruments like FDs or gold. Equities will give you a 14-15% return compared to traditional forms of investing,” Kumar said.
“We have less than 1 crore people investing in mutual funds in the country. India has only 3-4% household penetration of mutual funds that compares poorly with mature markets like the US that has 45%,” he said.
Omidyar Network’s Investments Director Anuradha Ramachandran believes Scripbox will make a difference in how people look at investments to save for post-retirement.
“As India moves from promoting adoption and usage of financial services to building consumers’ financial health, simplified offerings like Scripbox will become more strategic. Scripbox is set to make a fundamental difference in the way Indians save and invest in their future, turning a deep understanding of consumers’ needs into an innovative technology-led platform,” BW Disrupt quoted Ramachandran as saying.
Scripbox was launched in 2012 by founders Kumar, Sanjiv Singhal and Atul Singhal and the start-up raised seed funding of Rs. 4 crores from Accel, IT Industry Veteran Balakrishna Adiga, Educationist Dr. H S Nagaraja and Kotak Realty fund CEO S Sriniwasan, according to another report by the ET.
Scripbox simplifies the investment in mutual funds by segregating eight funds from thousands available in the country. It separates those eight funds into three categories – Equity funds (for long term; more than 5 years), Debt funds (for short term; less than 5 years) and Tax-saving funds (to reduce tax), allowing investors clarity.
According to the Scripbox website, the selected funds are reviewed once a year and changes are made accordingly. Its customers can also “switch from old to new funds with just one-click.”
“Too much choice is much the same as no choice. Right now, there are more than 800 mutual funds, chasing 400 actively traded stocks on the market. What Scripbox does is evaluate these mutual funds on a series of parameters and select four funds that meet our criteria. These we offer to our customers,” Singhal had earlier explained in an interview to the Times of India.
“Almost 70% of our customers are first-time investors. Interestingly, 18% of our customers are women, whereas, the industry average is 12%. With a simple registration process, one can invest from as low as Rs 1,000 a month,” Kumar had told Deccan Chronicle earlier in June.