Capitalmind gets Zerodha's Rainmatter backing after MF debut success

Capitalmind secures Series-A funding from Zerodha's Rainmatter after raising ₹45 crore in its mutual fund NFO. The Flexi Cap Fund reopens as Capitalmind targets retail and HNI investor segments

Capitalmind Financial Services Pvt Ltd (CFSPL), a Sebi-registered portfolio manager known for its quantitative investment strategies, has received its first institutional funding through a Series-A investment from Rainmatter, the fintech-focused initiative of Zerodha Broking Ltd.

 

The funding comes on the heels of Capitalmind’s mutual fund debut, as its Flexi Cap Fund reopens for subscriptions today after raising ₹45 crore during its New Fund Offer (NFO). Of this, around 75 per cent came through direct plans -- nearly half routed via Zerodha’s Coin platform, according to a Capitalmind statement.

Direct plans dominate fund inflows

The high share of direct inflows reflects investor trust, and also marks a shift in Capitalmind’s distribution approach. The remaining 25 per cent of the NFO corpus was raised through regular plans, suggesting early traction among distributors. This is a notable change from Capitalmind’s portfolio management services (PMS) business, where distributors account for under 3 per cent of the clientele.

 

 

The company’s flat-fee structure for brokerages is being seen as a step towards making distribution more equitable and transparent.

A long-standing relationship

The investment formalises a long-standing association between Zerodha founder Nithin Kamath and Capitalmind founder Deepak Shenoy. Shenoy was an early advisor to Zerodha in 2010, and both companies have since shared a focus on investor education.

 

Zerodha’s outreach platforms -- including the Varsity education portal, TradingQnA forum, and Zero1 YouTube channel -- have grown in parallel with Capitalmind’s content-driven model of blogs, podcasts, and research.

 

Kamath 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. This is a financial investment to support them as they build out their asset management company. In line with Sebi regulations, our stake is capped at 10 per cent, and we will not have a board seat, ensuring their independence."

Capitalmind eyes broader retail base

Capitalmind’s founder Deepak Shenoy sees the Rainmatter investment as a validation of the company’s evolution from a financial blog into a full-stack asset management firm.

 

"Nithin’s work in sparking my interest in quantitative trading years ago was a pivotal moment for me," Shenoy said. "Having Rainmatter invest in our vision is a powerful validation of our journey. This capital allows us to accelerate our mission of filling a crucial market gap. The professional fee-only advisory ecosystem hasn't scaled as hoped, leaving investors to navigate a complex landscape. We aim to bridge that gap through accessible, solution-oriented products, much like the target-date funds discussed in Sebi’s recent consultation paper."

Distinct strategies for mutual fund and PMS businesses

Capitalmind plans to operate its mutual fund and PMS businesses on separate tracks. The mutual fund arm will focus on scalable retail products, while the PMS division will continue targeting HNIs and ultra-HNIs with customised asset allocation strategies that emphasise tax efficiency.

 

The PMS segment currently manages over ₹450 crore, largely through baskets of mutual funds.

 

Though Capitalmind accounts for just 0.5 per cent of the PMS industry's discretionary AUM, Shenoy sees far more scope in the retail mutual fund space. With industry projections estimating a 15 per cent CAGR, taking total AUM to ₹200 trillion over the next seven years, Shenoy believes capturing even 0.5 per cent of that future market could translate to ₹1 trillion in assets -- a significant milestone for the firm.