Startup Smartkarma Raises $13.5 Million in Bet on MiFID Demand

  • Round led by Sequoia India and includes Jungle Ventures
  • Singapore-based startup aims to capitalize on MiFID II rules

These EU Rules Will Upend Trading

Smartkarma, an online marketplace that connects investment research on Asian companies with professional investors, raised $13.5 million in a round led by Sequoia India to fund its international expansion.

The series B round brings the total capital raised to $21 million, the Singapore-based company said in a statement Monday. Existing investors, including Wavemaker Partners, Jungle Ventures and Spring Seeds, also joined the round.

Smartkarma’s expansion comes at a time when the European Union is set to roll out the new Markets in Financial Instruments Directive. The so-called MiFID II legislation takes effect in January and requires investment banks to charge for research, which has long been bundled with trading commissions and other services fees. The rules are expected to curb profit margins at asset managers, who will have to budget for research for the first time.

Raghav Kapoor and co-founders Jon Foster and Lee Mitchell at the Smartkarmaplex.

Source: Smartkarma

“This becomes a great environment for us because in such an environment, people want to focus on quality and transparency of payment,” Chief Executive Officer Raghav Kapoor said in an interview.

Smartkarma makes money by charging subscribers an annual fee to access analysis on everything from tech IPOs to the political situation in Saudi Arabia and China. The annual subscription starts at $7,500 per user. It pays its 400 contributing analysts freelance fees based on the popularity of their research among users. The company plans to follow its new London office with a presence in Germany and New York soon, according to Kapoor.

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