Capitalmind Receives Strategic Investment from Rainmatter Following Mutual Fund Launch The investment, part of a Series-A round, comes on the heels of Capitalmind's entry into the mutual fund space through its newly launched Capitalmind Mutual Fund.
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Capitalmind Financial Services Private Limited has secured its first institutional funding with an investment from Rainmatter, the fintech initiative of Zerodha Broking Limited. The investment, part of a Series-A round, comes on the heels of Capitalmind's entry into the mutual fund space through its newly launched Capitalmind Mutual Fund.
The announcement coincides with the reopening of the Capitalmind Flexi Cap Fund for subscriptions on August 6. The fund's recent New Fund Offer (NFO) raised INR 45 crore, with an impressive 75 percent of the inflow coming through direct plans. Nearly half of these direct investments were made via Zerodha's Coin platform, underlining the alignment between the two companies.
The remaining 25 percent of assets were invested through regular plans, showing early acceptance by the distribution community. This marks a shift for Capitalmind, whose Portfolio Management Services (PMS) business previously saw limited distributor participation. The firm's flat-fee brokerage structure for mutual funds has been well-received by advisors and distributors alike.
Nithin Kamath, Founder and CEO of Zerodha and Rainmatter, said, "We want to back innovative companies that share our mission of helping Indians do better with their money. My conversations with Deepak about finance and technology started back in 2009, and I've always been impressed by Capitalmind's data-driven, transparent approach." He added that the investment is purely financial, with no board seat and a capped stake at 10 percent in accordance with SEBI norms.
Deepak Shenoy, Managing Director and CEO of Capitalmind Asset Management, expressed, "Nithin's early work sparked my interest in quantitative trading. Having Rainmatter invest in our vision validates our evolution from a blog to a full-stack asset manager. The capital will help us address a gap left by the slow growth of the fee-only advisory ecosystem by offering simple, solution-oriented products to retail investors."
Capitalmind plans to drive growth through two distinct business arms. The mutual fund division will aim to scale accessible investment products for retail investors, while the PMS arm will focus on high-net-worth clients with curated mutual fund portfolios offering tax-efficient asset allocation. Capitalmind currently manages over INR 450 crore in such portfolios.
While its PMS business accounts for just 0.5 percent of industry assets, the company sees greater promise in the mutual fund sector. Shenoy believes capturing even a small share of the projected INR 200 lakh crore mutual fund market in seven years could result in a transformative INR 1 lakh crore in AUM.
