Fintso has announced the acquisition of WealthMagic – a SaaS provider in the wealth management space. The specific financials of the deal remain undisclosed. Fintso divulged that it is a part-equity and part-cash deal. The acquisition by Fintso is aimed towards extending its platform to reach the next billion investors in India by equipping and providing multi-product solutions to the distributors who are key to this wave of financial inclusion.
The combined entity will now cater to over 15 lac retail investors with investments to the tune of ₹1.4 lac crore / $20 billion of assets, which is being managed by over 3,400 financial product distributors.
WealthMagic is one of the largest SaaS providers to mutual fund distributors, transforming their back and front office operations. WealthMagic was launched in 2016 by Datacomp Web Technologies, a well-known player in the insurance and financial services automation sector, providing solutions for insurance companies, AMCs, brokers, and agents for the past 30 years.
This acquisition helps Fintso augment its presence among India’s growing investor base. Fintso’s digital-first financial products suite will enable the WealthMagic users to become Independent Financial Products Providers (IFPPs) with multi-product, multi-manufacturer distribution capabilities. The state-of-the-art cloud-native platform enables them to expand their reach while benefitting from cutting-edge AI-based advisory.
Rajan Pathak, Co-founder and MD, Fintso, said “Datacomp has been doing commendable work in enabling the financial intermediaries through technology for the last 30+ years. The combined offering of Fintso and WealthMagic brings the next generation of solutions, with multi-product access, digital execution, and advisory thereby addressing the end-to-end needs of investors. The impact of this acquisition will be extremely long lasting as it begins with strengthening the financial entrepreneurs and democratizing wealth management through technology.”
Currently, of the 100 million households in India, 90% live in Tier 1 and beyond. This makes outreach and distribution beyond the Top 30 cities extremely inefficient and under-penetrated.
The acquisition will help bring the Independent Financial Product Provider (IFPP) model, envisioned in Fintso’s whitepaper ‘The Next Billion – Inclusion Through Digitization’ to life. This model will not only increase outreach and digitization and provide a thrust to cross-selling of products for financial entrepreneurs but also bring last-mile connectivity required for outreach beyond the Top 30 cities in a cost-effective manner.
George Mitra, Co-founder and CEO of Fintso, further added, “We are extremely excited at this development. It allows us to offer multi-product execution and advisory services to the users of the WealthMagic SaaS platform, which encompasses a large network of investors. With over 44 million individual data points, we are now equipped for the next step – machine learning and data analytics on investment behavior. This enables us to help distributors provide insightful and personalized micro-advisory to investors.”
Ajay Arora, Co-founder and CEO of Datacomp said – “We are delighted to see WealthMagic synergizing with Fintso. We believe our shared vision to provide a holistic wealth management solution will revitalize the ecosystem and help accelerate the growth of new investors from Tier 1 cities and beyond.”
Explaining the transaction, George Mitra added – “This consolidation will set the stage for the next phase of our growth – to widen our footprint and target the 100 million households that will start investing over the next decade. Fintso’s cloud-native platform will reinvent and strengthen the ‘bridge-of-trust’ that the independent financial product distributors represent to the investors they serve.”
The transaction comes at the back of a further fundraise by Fintso of ~ $3 million from its existing base of angel investors including Brijesh Agarwal (Co-founder & Director of IndiaMart), Dilip Khandelwal (Global CIO of Deutsche Bank), Kanwaljit Singh (Fireside Ventures), Nikhil Vora (Sixth Sense) and some of the large family office funds in India.