The deal, announced by Angel One on Wednesday, marks the first-ever tech acquisition for the 27-year-old brokerage firm which has been focusing on building in-house capabilities.
The development comes as the brokerage firm is looking to double down on its ‘fintech superapp’ play, and introduce more services, such as insurance and lending, on its platform amid competition from rival broking firms Zerodha and Groww.
As a part of the deal, the founders of Bengaluru-based Dstreet Finance–Suresh Bavisetti and Paarth Dhar–will join Angel One to spearhead its content, user engagement and learning-related initiatives. They will also look at launching fresh assets under the Angel One brand.
Dstreet’s 12-member team will also join Angel One.
Dstreet, founded in 2021, was a gamification-led educational learning platform for those new to the stock market, and gained a customer base of 1 million users.
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“The customers who are participating in equity and capital markets have gotten much younger (who are keen to learn),” said Prateek Mehta, chief business officer of Angel One, told ET. “The average age of our customers is around 28 years. And as the stock market evolves, there is a constant need for learning. For all those learning states, there is a massive play of both content and engagement. This team will focus on these problems.”Mehta declined to comment on the deal size.
“The integration of the Dstreet team is a strategic move towards enhancing our offerings for the next-generation clients,” said Dinesh Thakkar, chairman and managing director of Angel One, the country’s third largest broker.
According to NSE data, Angel One had 4.8 million active users at the end of September 2023. Groww and Zerodha had 6.62 million and 6.4 million active users, respectively.
Also read | Groww goes past Zerodha, becomes India’s biggest stockbroker with 6.6 million active users
Focus on inorganic bets
Angel One’s acquisition strategy is focused on six distinct segments including enhancing manufacturing capabilities (for new financial products); creating new distribution channels; better wealthtech and service offerings for retail masses; creating adjacencies to core broking service such as algorithm, data modelling platforms, and to improve content and engagement with the audience.
Earlier this year, Angel One had received in-principle approval from the Securities and Exchange Board of India for the asset management company (AMC).
It is working towards launching consumer credit in the next three to four months and setting up an AMC in the next 10 months.
Inorganic acquisitions will also help the broker launch newer solutions faster for its clients.
“We don’t want to build everything on our own because we feel through inorganic (acquisitions) we can accelerate our go-to-market and shorten our learning curves, while delivering value to our customers faster,” said Mehta.
For its inorganic growth strategy, Angel One is also looking to leverage its profits.
Mehta declined to say whether the broker has set aside capital for this or on how many acquisitions it is targeting.
For the year ended March 31, 2023, Angel One reported total operating revenue of Rs 3,001.6 crore, with profit standing at Rs 890 crore. September quarter revenue from operations grew by 30% sequentially to Rs 1,048 crore, while net profit stood at Rs 304.5 crore.